Diversification
A risk management strategy involving a variety of investments.
Business Glossary provided by Plannit.ai
Diversification is the practice of spreading investments around in order to mitigate risk. This strategy involves allocating investments among various financial instruments, industries, and other categories in order to maximize return by investing in different areas that would each react differently to the same event. Although it cannot guarantee against loss, diversification is the most important component of reaching long-range financial goals while minimizing risk.
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