Learn it.
Then practice it.

More holdings don't always mean more diversification.

A portfolio's risk depends on what the holdings are exposed to. Investments in different companies can still fall together if they depend on the same industry or economic conditions. Spreading exposure can reduce concentration risk; it cannot eliminate losses.

In this exercise, compare one fictional company, a fictional diversified stock fund, and a fictional bond fund. Their scenario movements are teaching assumptions, not predictions or typical returns. Actual funds may behave very differently.

Buy whole virtual units, then choose a scenario to observe the effect. You can sell units, try another allocation, or reset. There's no recommended allocation and no “winning” portfolio.

What changed—and why?

• In the company-setback scenario, which holdings contributed to the change?
• What happens in the broad-decline scenario even when you own different assets?
• How does holding cash change the portfolio's response? What does this exercise leave out, including inflation?

To compare allocations fairly, reset between attempts, build at starting prices, and apply the same scenario. Switching scenarios after trading can create artificial profits or losses; those results aren't evidence of a workable strategy.