Diversification

What is it? The process by which investors hold a variety of different types of investments (asset classes) in an effort to reduce the overall volatility of the portfolio. Since different types of assets--such as bonds and stocks, or U.S. stocks and foreign stocks--tend not to move in tandem, a well-diversified portfolio should be able to perform better in a range of market conditions than a portfolio that has placed all its bets on just one asset class.

Added By: Evan

Send To Friends!

If you'd like to send the Diversification definition to yourself or to your friends/colleagues, just enter the e-mail addresses in the boxes below -

We hope you now understand the meaning of Diversification. If you need any more information on this term, please don't hesitate to contact us.