It is a norm to invest in assets that offer high returns, but it could lead to putting all eggs in one basket. When an investment is made in high-performing assets, you end up buying at a higher price. When judged on a risk-return basis, the risk is as high as the return. Considering the movement of the market, a diversified portfolio will help distribute financial risks across different segments and different industries to maintain a balanced and diverse portfolio.
This is where diversification of a portfolio helps. Diversification is the only key to maintain risk levels at the lowest and make an effective investment plan.