When you start your investment journey, one of the first things people advise you to do is to diversify your portfolio. This is an oft repeated advice which has helped investors tide over uncertain times and smoothen their portfolio returns. Diversification simply entails spreading our investments across multiple instruments that are differentiated in their risk/return profile. It stops you from pinning all your hopes and fortunes on a single stock or instrument. In the current investment climate, where we are witnessing heightened volatility and an alarming rate of credit events, building a diversified portfolio becomes even more relevant.