It’s possible to lose money in any portfolio. A widespread economic turndown will affect all portfolios, such as the 2008 banking crises or the 1987 stock market crash.
But the difference is that a diversified portfolio in 2008 or 1987 will survive and bounce back over the years. A portfolio involved in real estate in 2008 or focused on stocks in 1987 will get crushed and will be very difficult to recover.
So even if you lose money, it will help you to stay “alive”, just like any form of insurance.