Diversification
Don't put all your eggs in one basket.
Simple explanation
Diversification is spreading your money across many investments — companies, sectors, countries, asset types — so one bad bet can't sink you.
Picture this
If you carry your eggs in 10 baskets and drop one, you lose 10%. If you put all 10 in one basket and drop it, you lose everything.
— Cash
Real example
Instead of €1,000 into one tech company, you put it into a world ETF and own pieces of 1,500 companies. One company tanking? Barely a ripple.
Common mistake
Owning lots of funds but they all hold the same companies. That's not real diversification. Check what your funds actually contain.
Quick check
What does diversification protect you against most?
Takeaway
One world ETF gives most beginners 80% of the diversification they need, instantly.
Related glossary terms
⚠️ Educational only · Never financial advice