Undiversified


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Undiversified

In risk management, the state of one's portfolio when it contains only a few securities or classes of securities. For example, if one invests exclusively in automotive companies or only in bonds, one has an undiversified portfolio. An undiversified portfolio carries a great deal of risk; for instance, if automotive companies or bonds perform poorly, it does not matter how well the rest of the market performs. On the other hand, the potential for gains is higher. In general, broader diversification equates to less risk and less return. See also: Markowitz Portfolio Theory.
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Family ownership, usually in the form of large, undiversified blockholdings, may increase the propensity to use hedging policies to reduce personal wealth portfolio risk at the expense of firm value.
Demand for reinsurance should especially come from undiversified insurers and mutuals without easy access to capital, and from increased use of reinsurance as a risk-mitigation tool, according to a recent report from consultancy Oliver Wyman and investment banker Morgan Stanley.
With few large private employers, the economic base remains undiversified and largely dependent on external factors, including federal and State fiscal policy, the health of the Anchorage economy, and the price of oil.
The commissioner said the species of tree has been selected by professional foresters from the city, the state and the federal government to assure diversity that will reduce the city's vulnerability to the beetle or other pests or diseases that have wiped out undiversified forests in the past or could in the future.
All in all, at this stage Norilsk remains a pure commodity play with low operational and geographical diversification, undiversified commodity price risk and no growth strategy.
The opportunity cost approach suggests that an undiversified investor requires a return that is as great as they would realise by leveraging up the market portfolio to achieve the same level of risk as their undiversified asset carries (Meulbroek, 2001).
The preferences of diversified investors are quite different from those of undiversified investors.
I do hope these AaeexpertsAAE were able to conduct independent scientific and business studies without political pressures from the executive to solve some of LibyaAAEs pressing economic or social problems Au such as high unemployment and LibyaAAEs undiversified source of national income.
The famines in Ireland in the nineteenth century and in Ethiopia in the late twentieth century provide clear evidence of the vulnerability of undiversified crops to environmental changes, and the dramatic consequences of such vulnerability for the population.
Over time, undiversified investments through ESOPs can be worth far less than half as much," he said
But these undiversified interpretations overlook perhaps the most important aspect of Dracula: its obsessive uncertainty about boundaries of all kinds.