Diversification is an investment strategy that spreads risk by spreading investments across different asset classes, sectors or markets. It aims to offset potential losses in a particular area and improve the overall performance of the portfolio. Diversification allows investors to reduce their risk while taking advantage of the opportunity for higher returns by combining different assets. The allocation can be made at any asset level (one share vs. 1600 shares, one asset class such as shares vs. a total asset consisting of shares, bonds, gold, real estate, private equity)