Definition of «diversification purposes»

The term "diversification purposes" refers to the strategy of spreading investments across various assets or industries in order to reduce risk and maximize potential returns. By diversifying, an individual or organization can mitigate the impact of a poorly performing asset on their overall portfolio, as they may have other investments that perform better or lose less value. In essence, it is about not putting all your eggs in one basket to minimize risk and maximize potential returns.

Sentences with «diversification purposes»

  • But I need to add one more utility position for diversification purposes, and if I can scrape together the capital, this one will be in my portfolio. (dividendsdiversify.com)
  • In the example below, we see how some asset classes used for diversification purposes actually performed worse than the core S&P 500 during major market downturns. (swanglobalinvestments.com)
  • If you do want to own a materials or energy stock — which you may want to do for diversification purposes — seek out the lowest - cost producer. (canadianbusiness.com)
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