Which of the following is a benefit of having a diversified investment portfolio?

Having a diversified investment portfolio helps to spread out risk across various asset classes, sectors, and geographic regions. This strategy minimizes the impact of poor performance from any single investment on the overall portfolio. With diversification, if one investment suffers a loss, other investments may perform well, which can balance out losses and lead to more stable performance over time.

This approach is particularly effective because different asset classes often react differently to market events. For instance, stocks and bonds might each perform well in different economic conditions. By holding a variety of assets, an investor can reduce the likelihood of experiencing drastic fluctuations in portfolio value, leading to a more consistent performance over time.

The other options suggest outcomes that do not accurately reflect the nature of diversification. While diversification doesn't guarantee stable returns in all market conditions, nor does it offer higher returns, its primary benefit lies in risk reduction. It’s important to understand that while diversified portfolios can lead to reduced risk, they do not eliminate it entirely or ensure high returns. The goal is to create a balanced approach that can withstand various market conditions.