ECONOMICS

Detailed explanation-1: -Portfolio diversification is the process of selecting a variety of investments within each asset class, which can help those looking for how to minimize their investment risk. Diversification across asset classes may also help lessen the impact of major market swings on your portfolio.

Detailed explanation-2: -Risk aversion is the tendency to avoid risk and have a low risk tolerance. Risk-averse investors prioritize the safety of principal over the possibility of a higher return on their money. They prefer liquid investments. That is, their money can be accessed when needed, regardless of market conditions at the moment.