Diversification is the investment principle of not putting all your eggs in one basket. By spreading your money across different asset classes (CDs, T-bills, gold, funds), different tenors (short-term vs. long-term), and different institutions, you reduce the impact of any single investment performing poorly.
The key insight is that different assets tend not to fall (or rise) at the same time and for the same reasons. When interest rates fall and bank deposit yields drop, gold often rises as an inflation hedge. When Egyptian banks tighten, government T-bills may offer more attractive rates. A diversified portfolio smooths returns over time.