Diversification
Diversification is the practice of spreading investments across different assets, issuers, borrowers, sectors, regions or other sources of risk rather than relying heavily on one exposure. The objective is to reduce the impact that a problem with any single investment can have on the overall portfolio.
Why it matters to you
Fractional ownership can make it easier to divide capital across multiple investments, but simply owning many tokens does not automatically mean a portfolio is well diversified. If those tokens depend on the same asset class, issuer, custodian or economic risk, significant concentration can remain.
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