Which concept involves reducing risk by having a variety of property investments?

The concept of diversification is a fundamental strategy in investment that aims to reduce risk by spreading investments across a variety of assets, in this case, different types of property investments. By diversifying, an investor can minimize the potential negative impact that a poor-performing investment might have on the overall portfolio. This strategy operates under the principle that different assets or property types may respond differently to economic changes; thus, if one investment declines in value, others may remain stable or even increase in value, thus balancing overall risk.

In real estate, diversification can take many forms, including varying property types (such as residential, commercial, or industrial), geographical locations, or different market conditions. This approach helps investors not only to mitigate risks but also to capture opportunities in diverse markets, enhancing their potential for stable returns over time.

Other options like capital appreciation focus on the increase in property value over time, property analysis involves examining the specifics of a property to determine its investment potential, and market speculation pertains to making high-risk investments based on predictions about market movements. These concepts do not specifically address the strategy of risk reduction through the assortment of investments, which is why diversification stands out as the correct choice.