Why Is Diversification Not A Good Investment Strategy? Diversification can lead into poor performance, more risk and higher investment fees! … The usual message to investors is: instead of diversifying from traditional stocks & bonds, diversify into multiple higher-cost exchange-traded funds that invest in specific sectors or strategies. What are disadvantages of diversification strategy? Reduces
What Are The Risks Involved In Unrelated Diversification? In many instances the overall performance of the unrelated business activities does not exceed the individual ones. As a rule, the implementation of unrelated diversification strategy requires allocation of significant financial and human resources and there is always the risk of harming the main company business. What
What Are The Two Ways An Unrelated Diversification Strategy Can Create Value Through Financial Economies? Unrelated diversification can create value through two types of financial economies: efficient internal capital market allocation and restricting a firm’s assets. In a market economy, capital markets are thought to efficiently allocate capital. What are the two types of diversification