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Diversification

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Diversification is a strategy companies and investors use to ensure they are not dependent on a single source of income, product, customer, supply, etc.

In finance, diversification refers to spreading investments across multiple securities, asset classes, geographic areas, etc. In business, it means serving more than one market or customer segment with more than one product or service.

In both cases, the goal is to minimize risk. A diversified investor suffers fewer losses if a particular investment drops in value. A diversified company is more likely to have stable revenues because it does not depend on just a few customers or markets to buy its products or services.

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