like healthcare or consumer goods are performing good.
2. Smoother Returns: Diversification may lead to stable returns over time. It could thus avoid the experience of peak and trough from one singular investment. The volatility associated with a portfolio might, therefore, be reduced and smoothed out.

. Risk Reduction: The most significant advantage of diversification is the reduction of risks. For example, if the sector of technology is going down, then the losses can be curtailed by having a diversified portfolio if other sectors like healthcare or consumer goods are performing good.