It is buying an array of investments rather than just one or two securities, which can also help diminish the emotional response to market volatility. After all, there are only a handful of times when all markets have moved in unison, and diversification provided little protection. In regular market cycles, using this strategy offers an element of security because gains in others offset losses in some investments.
a. Asset Allocation.
b. Diversification.
c. Mental Account.
d. Dediversification.