Connor wants to begin investing a portion of his income for retirement. He talks to an investment consultant, who advises him to diversify. Write a short explanation in which the consultant explains diversification and its importance

It's similar to hedging, or not putting all of your eggs in one basket. Let's say you only invest in oil. You're return on investment is at the mercy of oil's standing in the commodities market, meaning, if the price of oil drops, so to does your ROI. However, if you hedge oil with something like, say solar power, your are now "protected" from fluctuations in either market.