The stock market game can be a tricky entity, but a way to reduce some of that danger is to diversify your portfolio. How can stock portfolio diversification reduce some of that danger? The stock market is loaded with risk, the most frequent being sector risk. Sector risk is the theory where all sectors go through their own periods of rises and falls. And within a portfolio, if you aren’t fully diversified in multiple sectors, the chances of a period in which you experience big losses will rise. Diversifying your portfolio prevents those risk and helps you grow your money steadily.