Investment in share market comes along with a no. of risk associated. There are various ways to reduce that risk and multiplicity is the most practiced one out of those various ways of risk reduction. Risk in Share Market is basically divided into two types, Diversifiable or Market risk and Un-diversifiable or systematic risk. And Investor has got to make peace with the systematic risk. But Market risk could be dealt with diversification. Heterogeneity can save an Investor from losing all his money at once. There are various reasons for the stocks of a company or sector to perform good, excellent, bad or worst. It could be economical factors, political factors, environmental factors, war situation, evolution of technology, changing trends, demand and supply etc. Whenever any danger hits the Capital Market, it won’t affect all the sectors by same extent.
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