Encyclopedia of Investment Terminology

Return to Stock Market and Investment Encyclopedia Index


Diversification refers to a risk management technique that minimizes the risk from a particular investment by spreading the investment portfolio among different companies, industries, or investments. Losses resulting from a particular investment within the portfolio have a smaller impact on the total investment because the portfolio is spread or diversified among several investments or companies.

Return to Index

Copyright 2008 StockDic.com
All Rights Reserved.