Asset Allocation & Risk
Does diversification prevent losses?
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No. Diversification can reduce a portfolio's volatility, but it cannot eliminate the risk of the market as a whole falling or guarantee a positive return.
In a crisis, assets that normally move differently may fall together, so it is best not to overestimate the benefits of diversification.
This answer is general financial information as of 14/10/2026, not investment advice. Rules and tax rates change, so please also check the latest guidance from the source institution.
