One of the very first things they will teach you in economics is that there is no such thing as a free lunch. However, there is a slight exception to this rule if you ask a few investors on Wall Street.

According to a number of Wall Street legends, diversification is the only free lunch you will ever get in the investing world. By maintaining a diverse portfolio it should statistically reduce its risk, but not necessarily its returns.

If you had an equally-weighted portfolio filled with just Westpac Banking Corp (ASX: WBC) and the other big banks, then you would be sitting on a 12-month loss of almost 24%. But by diversifying your portfolio with a few quality shares from different industries, I believe you would have avoided such a decline.

This leads us onto three shares which I believe offer investors not just diversity, but also growth and income. I feel this trifecta should provide investors with strong returns over the next 12 months.

G8 Education Ltd (ASX: GEM)

Childcare operator G8 Education is a great example of a company that I believe is a great investment for both growth and income investors. The market expects that in FY 2016 it will pay an estimated fully franked 6.5% dividend, as well as grow its earnings by 12.5% over the next couple of years.

Thanks to sustained demand in the childcare industry the company has been able to grow its revenue now for nine consecutive years. I expect this will continue to be the case as the company continues its growth through acquisition strategy.

Macquarie Group Ltd (ASX: MQG)

Macquarie’s shares are down 23% year-to-date which not only makes this a potential bargain buy, it also means the shares provide a partially franked estimated dividend of 6% in FY 2016.

The company has shown that it is one of Australia’s best and most innovative financial services companies. Late last year the company introduced a robo-advice platform that many believe could be industry-changing. For a modest fee the average Australian can get computer-generated financial advice on demand.

Retail Food Group Limited (ASX: RFG)

The franchisor of a number of well-known brands such as Gloria Jeans and Donut King has been on fire this year. Retail Food Group delivered a great interim result which saw net profit after tax jump by 27% to $32 million.

The company generally pays out two-thirds of its earnings as dividends, which I believe is great news for shareholders. Its aggressive expansion plans means it is expected to grow earnings by 9% per year through to 2018. This should mean its fantastic estimated fully franked 5.5% dividend should continue growing for some time to come.

Foolish takeaway

Additionally, as the three shares are from different industries I feel it should provide investors with a diverse portfolio which achieves the aim of lowering its overall risk.

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia owns shares of Retail Food Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.