Therefore, you should have less risk than if you put all your money in one type of investment, such as stocks or bonds. At the same time, careful diversification can offer higher returns than you would expect from investments in only the most conservative types of assets, such as money market funds. Diversification also makes sense because no single asset class performs best in all economic environments. No one can consistently predict which type will perform best in any given period. The smartest strategy, therefore, is to avoid putting all your eggs into one basket.
Diversification Can Improve Returns.
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