Diversification is a risk management strategy that mixes a wide variety of investments within a portfolio. A diversified portfolio contains a mix of distinct asset types and investment vehicles in an attempt at limiting exposure to any single asset or risk. The rationale behind this technique is that a portfolio constructed of different kinds of assets will, on average, yield higher long-term returns and lower the risk of any individual holding or security.
Related Posts
Personal Finance Advice
Learn How to Save and start early. If you don't know the power of compounding returns, learn it, because it will make you excited about…
Quotes on Finance
Finance, Money, Quotes / By Zaviad Team
Finance is a broad field that encompasses the study of both the management of money and capital markets. It can be divided into three distinct…
Consumer Purchase Funnel
Finance, Terminology / By Zaviad Team
The consumer purchase funnel is a useful tool for understanding how consumers move from interest to purchase. It is a process that starts with an…
Transaction Costs
Finance, Terminology / By Zaviad Team
Transaction costs are the hidden costs of doing business. They include things like waiting time, paperwork, and communication. Transaction costs can make it harder for…