Avoid concentrating everything in one stock, platform or property
Assets that do not rise and fall in perfect unison can reduce portfolio fluctuations for a given expected return. If all your money depends on one stock, platform or home, its failure becomes your whole portfolio's failure.
What it takes
Free. Accept that you will not put everything into the single best-performing asset.
What you may gain
Markowitz's 1952 portfolio-selection result shows how imperfectly correlated assets can lower volatility while maintaining a chosen expected return. Expected return is the average anticipated gain; volatility describes fluctuations. With everything in one stock or platform, its variance becomes the portfolio's variance and no other asset offsets its losses.
Context & considerations
Grade B because the cited classic is a mathematical derivation, not a measured amount of loss prevented. Diversification reduces fluctuations but does not guarantee against losses. Broad-market index funds are one simple diversification route. This is not investment advice.
Research & references
Markowitz, H. (1952). Portfolio Selection. The Journal of Finance, 7(1), 77–91. https://doi.org/10.1111/j.1540-6261.1952.tb01525.x