Diversification is a term that is closely related to business and investment. Simply put, diversification is an investment strategy carried out by individuals and companies to develop various investment products in order to minimize the risk of unexpected conditions in the future while maximizing profits.
Diversification is a risk management strategy that combines various investment instruments with different characteristics such as asset class, currency, geographical location, and sector to minimize the risk of loss due to the decline in the value of certain investment assets.
A professional investor will certainly put his funds into several investment instruments. So, when one investment experiences a decrease in its asset value, not all investments are significantly affected or as the saying goes do not put all your eggs in one basket.