A principle of investment management that calls for spreading investments across a number of different assets, securities, and industries. Diversi-fication is important because it reduces the investor’s risk because each asset class is likely to have different risks. Diversification also can occur within asset classes, such as buying equities of both small companies and large companies, which typically move in different cyclical patterns. Companies may also diversify by selling different products or by entering different industries.
Other Word Forms
Origin of diversification
From Medieval Latin diversificatio, from diversificātus, past participle of diversificō (“diversify"), from Latindiversus (“turned in different ways") + facio (“make, do")
Diversification Sentence Examples
The period since the Civil War has been marked by a diversification of industries.
This will help you enhance your investment portfolio and provide enough diversification to avoid market downturns.
A really good business plan will incorporate contingencies such as diversification or unexpected opportunities.
Growing diversification has meant that the Group's business culture is highly variegated.
This lower covariance should make REITs a better diversification investment vehicle.