It’s important to diversify your portfolio within your asset allocation, just like it’s important to have investments in various asset classes. Both help reduce your risk.
For example. You may have 75% of your portfolio invested in stocks. Of that 75%, you’ll want to make sure you have stocks that are invested in different industries so when one industry tanks (like financials currently) and another skyrockets (energy) you’ll still come out ahead.
It has been proven over time that it will decrease your risk without compromising returns over the long haul.
