While diversifying your portfolio is essential, overdiversification can lead to disappointing results.Experts agree that diversification is the best way to protect the overall value of your portfolio. By including a mix of investment types that behave differently under specific economic conditions, you can reduce the risk of poor-performing investments.For example, imagine you invest all your money buying stock in a hot new company and that stock suddenly drops by 40% or 50%. Your portfolio takes the full h ...