Diversification (strategy)

Okay kiddo, let's talk about diversification! Imagine that you have a whole bunch of different toys to play with, like dolls and cars and blocks. If you only played with one toy all the time, you might get bored or run out of things to do. But if you play with lots of different toys, you can have more fun and keep yourself entertained for longer.

It's kind of the same thing with investing money. If you put all your money into just one thing, like a certain kind of toy, you might run into problems if that thing doesn't do well. But if you spread your money out over lots of different things, like different kinds of toys, you can reduce the risk of losing all your money if one thing doesn't do well.

This is called diversification. It means putting your money into different investments, like stocks, bonds, or real estate, so that you have a mix of different things. This way, if one investment does poorly, you still have other investments that might do well and help balance things out.

So, just like playing with lots of different toys can make things more fun and interesting, diversifying your investments can help protect your money and make sure you have a better chance of doing well in the long run.