I hear about diversity all the time. The pro's tell you to spread out your investment money into both stocks and bonds so you don't lose all your money if the market goes way down. To me, this is a defensive strategy. It minimizes your potential loss. If your close to retirement this isn't a bad idea to look at.
I heard a financial advisor on the radio I listen to talk about how foolish this is. He said you may minimum your loss but your not going to maximize your potential gain if you do this. If you put your money into something that is very diverse and it only makes 10% that just doesn't work for me. It may be very low risk but i would rather take more risk and get 20% or more and let it compound for years especially if I was young. My 401K (for example) is in a high risk mutual fund and I watch it closely. You could say it's diversified because it's made up of many stocks. I would never invest a big chunk of money in a single company stock. Think Enron.
On a broader note, I would look at diversifying my money into different types of investments if you have a chance to. Personally, when I retire I will collect money from my 401K, Roth, Pension, rental property, and SS. Wife also has a pension (teachers retirement) which we're going to move over to an IRA once she retires and her 403B.