EBSCOhost

A portfolio should be diversified, according to investors. Investing in a wide range of companies lowers the risk of capital loss due to a company's failure. By offsetting the negative returns through one market with good returns in the other, diversification helps the portfolio to increase in terms of a rising market. By examining the link between various industries and making investments accordingly, risk can be reduced through diversification as well. For instance, profits from investments in the aviation sector may be high when oil prices are low, while earnings from investments in the oil sector may be low at the same time, lowering...