Lesson 5 of 6 · 4 min · pass for +50 XP
Diversification
Don't put all your eggs in one basket: an old saying that's still true.
1Why diversify
A single stock can drop hard because of news about that one company. If you hold several stocks across several industries, the damage from any one of them gets diluted.
2Ways to diversify
Different industries (tech, healthcare, finance, consumer goods) · different company sizes · or hold an ETF that already bundles many companies together.
Holding 5 stocks that are all tech isn't really diversified, because they tend to move up and down together.
3In the contest
Going all-in on one stock might win by luck, but it usually ends near the bottom of the leaderboard. Practice spreading your money across several stocks and setting a STOP on every trade; your long-run results will be steadier.
🎯 Quiz 2 of 3 right: +50 XP · all correct: +20
For educational purposes only — not a recommendation to buy or sell any security. Investing involves risk.