A diversified portfolio refers to an investment strategy that involves holding a variety of assets, such as stocks, bonds, and other securities. The goal is to spread risk across different types of investments in order to reduce the impact of any one asset on the overall performance of the portfolio. By having a diverse mix of holdings, an investor can minimize losses during market downturns while also maximizing potential gains when markets are strong. A well-diversified portfolio is considered a safer and more stable approach to investing over the long term.