The benefits of diversification and pitfalls of over-diversification
Diversification mainly helps in smoothening out income, as you are able to earn from more than one type of asset
Diversification is a very wide term. Applied to investing, diversification refers to adding more than one type of security or asset to your overall financial portfolio. Many average investors do this by default, when they buy small amounts of gold for the future, along with putting money in a fixed deposit and having a second apartment that they may have rented out. Add to this a mix of portion of equity investments and you have a diversified asset portfolio.