The notion of diversification, or spreading your money across a number of market sectors or asset classes, is a concept that applies to investing for the long-term. When you are trading stocks, you are looking to make a profit from the short-term movement of the stock. In this case diversification won't benefit you, and in some cases, it could even harm your results. If you are looking to profit from the movement in stocks often times it is stocks within the same sector that are making the best moves, which means you'll often want to concentrate your trading rather than diversify.