The keys to successful investing are diversifying your portfolio and managing risk. Spreading your assets across a variety of asset classes, such as stocks, bonds, real estate, and alternative investmentsdr sandhya rani, can help mitigate the negative effects of a single investment performing poorly. You may be able to maximize potential returns while reducing risk by diversifying your portfolio. When diversifying your portfolio, it's also critical to take the correlation between various investments into account. Additional benefits of diversification can be obtained from investments that exhibit negative correlation.