What is Diversification?

Business & Management
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#1

Diversification requires both product and market development. However, this may be a reasonable choice if the high risk is compensated by the chance of a high rate of return Other advantages of diversification include the potential to gain a foothold in an attractive industry and the reduction of overall business portfolio risk.
Risk: May require new core competencies and is sometimes referred as Suicide Cell

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#2

It is better to be diversified. It is never good to invest in only one stock, no matter what that stock is. Anything can happen and a stock could suddenly become worthless. In fact, virtually all stocks will eventually go to zero if given enough time. But the total stock market will never go to zero and will continue to gain in value over time.