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Portfolio Diversification refers to the practice of allocating investments across various asset classes, sectors, and geographic regions in order to minimize risk and optimize returns. By spreading investments across different types of assets, such as stocks, bonds, real estate, and businesses, investors can protect themselves from the potential negative impact of a single investment or market event. Financial management strategies often emphasize the importance of diversification in building a resilient and profitable portfolio. This approach allows for a more balanced risk profile and increased opportunities for gains, making it a key consideration in any comprehensive investment plan.