When it comes to investing, utilising the concept of diversification is always the first step in building a sound long term portfolio.
Diversification starts at an asset allocation level and then cascades down to the selection of individual countries,sectors,and specific investment holdings.
In every portfolio there are two major risks, namely that of ‘Market risk’ and ‘Specific risk’ (please note that they are not the only risks).
’Market risk’ is a risk that affects everyone generally in the same way such as war,economic change,or the behavior of human sentiment. An example of this