In as much as every investment has a loss and profit, it is important that the investment is diversified. Diversified assets can help in reducing risk because different assets has it's own season that they perform well, whether and economic changes can affect or profit some assets.

When you diversify your assets and the season doesn't favor one at a particular time, the other assets that are in favor of the season will cover up for your loss at that moment and this will help you to manage the risk of loss.