MANAGEMENT

Detailed explanation-1: -The primary purpose of diversification is to mitigate risk. By spreading your investment across different asset classes, industries, or maturities, you are less likely to experience market shocks that impact every single one of your investments the same.

Detailed explanation-2: -This strategy has many different ways of combining assets, but at its root is the simple idea of spreading your portfolio across several asset classes. Diversification can help mitigate the risk and volatility in your portfolio, potentially reducing the number and severity of stomach-churning ups and downs.

Detailed explanation-3: -Get different types of life insurance plans Opt for other life insurance plans such as endowment or money back plans and diversify your portfolio with different kinds of returns. Endowment plans give you good returns whereas money back plans give you returns that are spread over a period of time.

Detailed explanation-4: -Over diversification is possible as some mutual funds have to own so many stocks (due to the large amount of cash they have) that it’s difficult to outperform their benchmarks or indexes. Owning more stocks than necessary can take away the impact of large stock gains and limit your upside.

Detailed explanation-5: -What is the purpose of having a portfolio? Portfolios provide a framework for your money. They help you oversee and manage your investments. A portfolio can help you diversify your assets and spread your risk across stocks, bonds, and other types of investments.