Why Diversity Alone Doesn’t Prolong

A few take aways from corporate finance or top investing professionals all talk about, diversity. Does it not sound odd to be too diverse? Secret manufacturing plants in a secret and far away country can be too diverse. Yet, it might have the right culture for the longevity of your financial commitments. If you are considering college and think about Finance as a major or graduate degree, one thought you’ll obtain from the instructors is proper diversity. Diversification is a process of enlarging or varying a company’s products or operations. A lot of top analysts, after their education probably agree on one topic, when it comes to this strategy. It's somewhat clever. It’s a managing strategy for risk. It's not a complete risk eliminator. There actually no such thing in academic literature. This is because more risk, typically correlates to a possible higher return. Not enough risk, usually results in less interest rate returns. Essentially, we want to optimize our diversity in a portfolio. The main point for those trying to improve their squawk on the street is to remember that too much diversity ‘fizzles’ your assets. Just as much as if you don’t have enough diversity. Diversity is something to add to your portfolio. It’s not the only thing in it. If you are trying to find the right diversity, cover these following topics. Here is what you should expect from Investopedia or Fidelity for proper diversity in a portfolio: 1. Spread the wealth, 2. Consider index of bond funds, 3. Keep building your portfolio, 4. Know when to get out, and 5. Keep a watchful eye on commissions. ------------ Palmer, Barclay. “5 Tips for Diversifying Your Portfolio.” Investopedia, Investopedia, 17 Mar. 2022, https://www.investopedia.com/articles/03/072303.asp. Segal. “Diversification.” Investopedia, Investopedia, 8 Feb. 2022, https://www.investopedia.com/terms/d/diversification.asp.