Diversifying your portfolio is a good advice for most investors because it protects us. I mean what happens if you have all of your money in one stock and that stock goes out of business. Generally speaking, it's safe and sound to diversify your investment portfolio if you're investing for a longer period of time. The easiest way to achieve diversification is to invest in index funds.

Essentially, you could own baskets of let's say 500 companies in one stock. For example, if you invest in voo vanguard 500 index fund etf, you are investing in 500 of the biggest companies in the united states within this fund. You are diversified in different industries such as technology, healthcare, consumer discretionary and many many more.