Series 6: 7.2.2.2.3. Diversification Strategies

7.2.2.2.3. Diversification Strategies

There is perhaps no more well-known portfolio management technique than the basic concept of diversification. As the name implies, diversification is the process of choosing a variety of assets to spread out the risk from any one asset. In doing so, customers avoid “putting all their eggs in one basket” and remove the possibility that poor performance in one position destroys an entire portfolio’s return. One strategy for achieving diversification is the buying of uncorrelated assets, or assets that do n