A strategy of holding different kinds of investments to minimize risk is known as?

The strategy of holding different kinds of investments to minimize risk is referred to as portfolio diversification. This approach involves spreading investments across various asset classes, such as stocks, bonds, and real estate, as well as within asset classes to reduce exposure to any single investment or risk. The fundamental principle behind diversification is that different assets typically react differently to market events; thus, when some investments may be performing poorly, others may be performing well, which can help stabilize returns overall.

By diversifying a portfolio, investors aim to lower the volatility of their overall investment outcomes. This strategy helps ensure that no single investment decision has an outsized negative impact on the investor's financial health. Portfolio diversification is widely regarded as a key investment strategy for managing risk effectively and is supported by modern portfolio theory.

In contrast, the other options do not accurately capture this essential investment concept. Balancing investments, safeguarding, and mixing and matching do not convey the specific risk management technique that diversification embodies.