Identifying great stocks is a very complicated process. Sure it’s rewarding, but at the same time, it can also be pretty risky. Hence, every investor should make it a point to safeguard his/her interest. If you put all of your money into an individual company’s stock and its price falls, you run the risk of losing your entire capital. To counter this, you should build a diverse portfolio to increase your opportunities for growth while minimising your investment risk. If you buy stocks in multiple sectors, you reduce your chances of your portfolio taking a major hit if a certain sector tanks.