investment-diversification

Vocabulary Word

Definition

The term 'investment-diversification' refers to spreading investments across different asset categories or sectors to reduce risk. This strategy can provide potential returns from various sources.

Examples in Different Contexts

In Portfolio Management, 'investment diversification' involves creating a mix of investments to achieve a more stable return over time. A portfolio manager might advise, 'Diversification is key to mitigating risk and achieving long-term growth in your investment portfolio.'

Practice Scenarios

Academics

Scenario:

Higher education funding has become rather insecure. What's our plan to ensure the continuation of our research projects?

Response:

You're right. We need investment-diversification across a range of research areas to secure our academia's future.

Technology

Scenario:

The tech sector can be unpredictable. How should our venture capital firm distribute funds to balance risk and reward?

Response:

Indeed! We need to factor in more investment-diversification in our strategy to balance potential risks and rewards across multiple sectors.