Investing in several types of securities B.) REDUCES RISK.
For example: You have $1,000 and you have the option to invest it in government securities, stocks, mutual funds.
You decided to invest in these three securities. In the event that any of the security becomes worthless, there are still two remaining securities that are earning you a return on investment. You may have suffered a loss but not totally.
Had you chosen to invest the whole amount to only one security and if said security becomes worthless, the whole $1000 will be lost.
Thus, investing in several types of securities reduces risk.
