Diversification means that losses on one position do not determine the overall portfolio outcome. It does not increase expected returns — it reduces the spread of possible results, decreasing the probability of both significant losses and exceptional gains.
Distribution works only when assets respond differently to events. Ten bank stocks from one country is not a diversified portfolio: they will depreciate together if the sector situation worsens. It makes sense to distribute across several dimensions simultaneously: asset classes (deposits, bonds, stocks), currencies, sectors, and issuers.
This approach has limits. Beyond a certain number of positions, further diversification barely reduces risk while complicating management and increasing costs. Additionally, diversification does not protect against market-wide decline when everything falls together — only matching the investment horizon and share of risky assets protects against that.
In the Uzbek market, the limited circle of liquid securities is a constraint. Under these conditions, diversification by asset classes and currencies is more practical than attempting to accumulate many different stocks, some of which may be impossible to sell at the right time.