The core idea
Owning investments with different drivers can reduce dependence on one company. Broad market declines can still affect them together.
A little more context
Money needed soon may not have time to recover after a market decline. Match risk to when you need the money.
What to remember
A large position in one business ties your outcome to that business. Several funds can still overlap in the same companies.
Pause and reflect: how would you explain this idea to someone who has never invested?