diversify


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Diversification

In risk management, the act or strategy of adding more investments to one's portfolio to hedge against the investments already in it. Ideally, this reduces the risk inherent in any one investment, and increases the possibility of making a profit, or at least avoiding a loss. This may also reduce the expected return on a portfolio, but it depends on level and type of diversification. There are two main types of diversification. Horizontal diversification involves investing in similar investments. Examples include investing in several technology companies or in different types of bonds. Vertical diversification involves investing in very different securities; for example, one may choose to invest in securities traded in different countries, or in both winter clothing and swimsuit companies. Both types of diversification may be as broad or as narrow as the investor chooses. In general, broader diversification equates to less risk and less return. See also: Markowitz Portfolio Theory.

diversify

To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries.
References in periodicals archive ?
Diversify WA sets out how we will capitalise on these strengths to attract trade and investment - growing our economy and creating jobs for the future."
It can be tough to diversify your portfolio on your own.
Diversify has been a three-time recipient of the NABCAP Premier Advisor award.
Sudbury did diversify, of course, and smart local politicians deserve a lot of credit for aggressively pursuing public sector plums, like the Tax Center and later the Northern Ontario Medical School.
Finally, it is costless to diversify. Complete diversification is available cheap even for the smallest investors, through mutual funds or folios at fees that are less than those that go with a brokerage account.
Even when the plan permits them to do so, few employees take the time to diversify by having the plan sell the shares and reallocate the proceeds to other investment options.
These are the transactions that are most likely to reflect a positive or negative opinion of the executive and not simply a desire to diversify.
"It makes good business sense to diversify your workforce," McGee says.
Moreover, we find no compelling evidence that internal governance failures are associated with the decision to diversify, or that governance characteristics explain the value loss from diversification.
Such transactions allowed the transferors to diversify their holdings, but the transfers were not taxable unless one of the specific anti-abuse provisions in the Code was triggered.(13)
By allowing bank management to choose a banking structure that improves its ability to diversify and that reduces its costs, banks will realize efficiency gains that will benefit borrowers and depositors alike.
M2 EQUITYBITES-October 16, 2017-Postern Acquires Jean Peterson Design to Diversify Service Offerings