Diversification is the foundation of resilient investing. By holding a mix of stocks, bonds, cash, and alternative assets, you protect your portfolio from the poor performance of any one category.

The goal is not to eliminate losses. Instead, diversification helps you smooth out returns so gains in one area can offset declines in another. Review your holdings periodically to make sure no single position has grown so large that it dominates your results.

To stay diversified, build or rebalance toward a target allocation that reflects your goals, time horizon, and risk tolerance. Automation, such as rebalancing alerts or managed portfolios, can make the process easier to maintain.