portfolio-diversity

Vocabulary Word

Definition

'Portfolio-diversity' is like having a pizza with many different toppings. In finance, it means holding different types of investments to spread risk.

Examples in Different Contexts

In retirement savings, 'portfolio diversity' is essential for ensuring that savings grow while being protected against market volatility. A retirement planner might explain, 'Incorporating a mix of stocks, bonds, and real estate can improve portfolio diversity and safeguard your retirement savings.'

Practice Scenarios

Academics

Scenario:

We are dealing with decreased funding this year. We may need to take a closer look at our research allocations.

Response:

With limited funds, we should maintain portfolio diversity by supporting smaller, less prevalent disciplines.

Business

Scenario:

Considering the current economic instability, I believe it's crucial to reassess our investment strategy.

Response:

Absolutely, perhaps we should increase our portfolio diversity and consider broader investment options.