The benefits of a diversified portfolio can be one way to approach risk managing your investments. Having a variety of assets spread across classes geographies, styles and size, could help to spread your risk exposure. A portfolio diversification helps to lower the volatility and can also smooth out returns of the current market and economy. One easy way to determine if your portfolio is diversified is by looking at your current performance. Diversified investments won’t move in the same direction at the same time. If some of your investments are up while others are down, you’ve got diversification.