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.
