Naive Diversification

Business / Finance / Naive Diversification: A strategy whereby an investor simply invests in a number of different assets in the hope that the variance of the expected return on the portfolio is lowered. In contrast, mathematical programming can be used to select the best possible investment weights. Related: Markowitz diversification.

Other Words for Naive

Naive Verb Synonyms: naive, ingenuous, innocent, credulous, childlike, born yesterday, unaffected, unsophisticated, inexperienced, green, unworldly, unsuspecting, unenlightened, unsuspicious, trusting, trustful, gullible, artless, guileless, simple, simplistic, simple
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Markowitz Diversification

Business / Finance / Markowitz Diversification: A strategy that seeks to combine in a portfolio assets with returns that are less than perfectly positively correlated, in an effort to lower portfolio risk (variance) without sacrificing return. Rela MORE

Naive Diversification

Business / Finance / Naive Diversification: A strategy whereby an investor simply invests in a number of different assets in the hope that the variance of the expected return on the portfolio is lowered. In contrast, mathematical programming ca MORE

Principle Of Diversification

Business / Finance / Principle Of Diversification: That portfolios of different sorts of assets differently correlated with one another will have negligible unsystematic risk. In other words, unsystematic risks disappear in diversified portfolios, and MORE

Magic Of Diversification

Business / Finance / Magic Of Diversification: The effective reduction of risk (variance) of a portfolio, achieved without reduction to expected returns through the combination of assets with low or negative correlations (covariances). Related: Ma MORE

Liquidity Diversification

Business / Finance / Liquidity Diversification: Investing in a variety of maturities to reduce the price risk to which holding long bonds exposes the investor. MORE

Diversification

Business / Accounting / Diversification: The process of spreading assets among different investments to reduce the risk of a decline in value of an investor’s total portfolio from a decline in any one investment. MORE

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