as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.
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choose one example to explain the concept of "diversification"
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an example of diversification is investing in a range of different financial instruments such as stocks, bonds, real estate and commodities. diversifying investments adds safety and reduces risk by reducing the portfolio's reliance on any one particular asset, sector, or market.
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