You'll need to either sell some of your stock investments or purchase investments from an under-weighted asset category in order to reestablish your original asset allocation mix. Upgrade to Premium to enroll in Principles of Marketing: Risk Tolerance - Risk tolerance is your ability and willingness to lose some or all of your original investment in exchange for greater potential returns. Create an account to start this course today. Rebalancing Rebalancing is bringing your portfolio back to your original asset allocation mix. The federal government guarantees many investments in cash equivalents. Here, we look at why this is true and how to accomplish diversification in your portfolio.

Diversification is a corporate strategy to enter into a new market or industry in which the business doesn't currently operate, while also creating a new product for that new market. This is the most risky section of the Ansoff Matrix, as the business has no experience in the new market and does not know if the product is going to be successful.

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Why You Should Diversify

Analyze diversification strategies based on their potential revenues and affect on your core business to achieve them. Diversification For example, if you have a dine-in restaurant in one town, opening a second restaurant in the . Diversification is a business strategy noted as offensive, defensive, concentric, horizontal, or conglomerate launch of new products in new or existing markets. Conglomerate diversification is a good means to manage risk as long as you can effectively manage each business, which leads us to the disadvantage. Management may not have the skills or experience to manage the new enterprises.