Systematic risk means risks that affect all investments. Diversify into different assets like stocks, bonds, real estate, and commodities to lower exposure to these widespread risks.
Different assets have different risk and return patterns. Diversifying helps your portfolio have steadier returns because some assets can do well when others struggle.
Unsystematic risk is specific to individual assets or industries. Diversification across unrelated assets can mitigate this, protecting your portfolio from significant losses tied to a single investment.