Diversification isn't just about increasing the sheer number of your investments. It's about striking a balance among various investments in your portfolio to reduce your exposure to risk and take advantage of the full range of opportunities in the market. First, you need to analyze what you already own before you make another investment. Then you can identify the category or categories within an asset class that you need to build up.
For example, if you own only long-term U.S. Treasurys in your bond portfolio, you may decide to purchase municipal bonds or short-term corporate bonds next. The municipals provide tax-free income, while the short-term corporates provide greater inflation protection.
Or let's say all of your stock investments are in large, blue chip companies. Then it may be time to investigate some smaller company stocks, since they tend to perform differently — and rise and fall in value at different times — from larger company stocks. In this way, you can offset some of the risks that each investment carries on its own, while enjoying many of the advantages and benefits of each category of investment.
For example, if you own only long-term 
Don Kittell