Most new investors make the same mistake: They put all their money into a handful of stocks, expecting quick returns. The problem? 95% of professional traders underperform the market in the long run (S&P Dow Jones Indices), meaning that individual stock-picking is a gamble for most. Instead, successful investors focus on diversification—spreading investments across different assets to reduce risk and stabilize returns. This chapter breaks down portfolio diversification in a way that’s easy to apply. You’ll learn how to allocate your assets based on your financial goals, risk tolerance, and investment timeline. We’ll explore different portfolio models, from conservative (low-risk, slow growth) to aggressive (higher risk, higher potential returns), helping you determine the best fit for your strategy. By the end of this chapter, you’ll understand why a well-balanced portfolio outperforms most individual investors, how to distribute your investments across stocks, bonds, ETFs, and alternative assets, and when to rebalance to maintain long-term stability.