transitive verb. 1 : to make diverse or composed of unlike elements : give variety to diversify a course of study. 2 : to balance (an investment portfolio) defensively by dividing funds among securities (see security sense 3) of different industries or of different classes diversify your investments.

What is diversification in simple words?

Diversification is the act of investing in a variety of different industries, areas, and financial instruments, in order to reduce the risk that all the investments will drop in price at the same time. ... Through diversification, investors can offset losses on some investments with gains on others.

How do you diversify?