Chapters in Portfolio & Risk Management
Chapter 1 of 6 · 4 min read
Portfolio diversification for beginners
Spreading holdings across sectors and regions reduces reliance on one name. It does not remove market risk.
Diversification limits the damage when one company or sector falls. A simple start is a core of liquid large caps plus measured sector weights, then reviewing concentration when adding mid caps, small caps or US listings.
Owning many stocks is not the same as being diversified: ten banks are one bet. Correlation matters more than count.
Check yourself
- No single stock above a weight you can stomach losing half of.
- No single sector dominating the book.
- A mix of market caps and, if suitable, asset classes.
- Watch fund overlap if you hold multiple mutual funds.
Key takeaways
- Diversify across uncorrelated risks, not just across names.
- Concentration should be a deliberate choice.
- Re-check as positions drift.
Put it into practice
Open the live page on Market Intelligence and see this concept on real data.
Keep learning
- Risk metrics: volatility, drawdown, VaR, beta and Sharpe · Portfolio & Risk Management
- Mutual fund holdings and portfolio overlap · Institutional Flows, Ownership & Risk
Education only, not investment advice. Updated 2026-10-09.