Diversification
Under diversification there are a few basic rules - one being not have all your eggs in one basket.
In other words, don't invest all your funds in one asset. e.g. - if you're putting money into shares, buy a selection of companies so that if one performs badly or goes bust, you won't lose all or nearly all of your money. Spread it around - diversify - it's the best way to spread your risk and reduce the volatility which might come from holding just one or a very small number of shares.
So, if you have just a few hundred or a few thousand pounds, you might feel limited to being only able to realistically buy two or three shares. A good alternative might be to buy a unit trust which tracks the biggest companies on the London stockmarket.