Skip navigation Personal Employer Adviser About us Register Login Pensions & Retirement Savings & Investments Equity Release Contact & Help Diversification Find out why diversification can be important when it comes to investing InvestmentsGuides What is diversification The value of your investments can go down as well as up and you may get back less than was paid in. What is diversification? Diversification is a relatively simple idea once you get past all the jargon. It’s an approach to investing that means you choose a mix of different investment types and countries. Put simply, it’s about trying not to put all your eggs in one basket. Diversifying your investments can help to spread risk and improve your potential for positive returns. It could have a positive impact on the value of your money in the long term, although there's no guarantee this will always happen. How does diversification work? Diversification is about spreading investment risk and smoothing returns. Investments are affected in different ways by different factors, such as economics, interest rates, politics, conflicts, even weather events. Diversifying means you’ll have a mix of investments across different types and geographical locations. So, the value of your investments should be less likely to change significantly than if you were invested in a single type of investment or location. Ultimately, it means that if one of type of investment doesn’t perform well, another might. This can mean that the value of your money should not move as much if markets go down or up and therefore help to smooth the returns you could get. How can you diversify? It's possible to do it yourself and build a diversified portfolio. But this can take a lot of time and work, and you need a lot of knowledge and experience to choose the best mix of investments. Because of this, many people choose to invest through funds run by professional investment managers. They'll pool your money with that of other investors and then divide it across a range of investments. You'll benefit from the managers' expertise and their ability to access a wider range of investments than those available to individual investors. You can choose funds that focus on one particular type of investment or country or, for greater diversification, funds that invest across a range of investments. These are sometimes known as multi-asset funds. Whichever route you choose, we'd always recommend that you speak to a financial adviser before you make an investment decision. If you don't already have a financial adviser, and would like to find one, you can get started on our financial advice page. There’s likely to be a cost for financial advice. Find an adviser Where to invest Find out about different types of investments, including potential returns and risks, and how to invest in them with Standard life. Where to invest Investing basics Investing can be a great way to help you meet your financial goals and save for the kind of future you want. The basics of investing MoneyPlus Get investment guides and market analysis from MoneyPlus. MoneyPlus Part of Phoenix Group Proud to be part of the UK's largest long-term savings and retirement business Help and Support About Us Help Online Services Login Register News and Views Savings tips & insights Latest news & reports Media contacts Connect with us Accessibility Legal information Privacy Policy Cookie Policy Provider details © 2021 Standard Life. All rights reserved We use strictly necessary cookies when you visit our website to give you the best experience possible and to keep things secure. We’d also like your consent to set other cookies to help us improve our website and to tailor the marketing you see. Manage settings > Decline All Accept All