Working on a variety of projects offers a diversification of skills and exposure to different people.
The insiders, who were obliged to hold a good chunk of their wealth in the form of Morgan Stanley's stock, have been offered a welcome diversification into other, unrelated, businesses.
It offers a nice diversification.
Because antiques and fine art are less liquid than, say, bonds, stocks, real estate, and currencies, they offer a level of diversification that, over time, may provide not only financial growth to the current generation, but aesthetic value and financial appreciation that can be passed down within a family.
More alarmingly, international stockmarkets have not offered any diversification either: they have shown a 95% correlation.
IndexIQ Chief Executive Adam Patti explains it this way: Hedge funds, even though they don't (on average) beat the market, do offer a useful form of diversification.
FOR investors who are truly frightened by the market's downturn, new funds like Nations Classic Value, from Banc of America Advisors, offer a return to more cautious diversification.
The bet is that by spreading out its investments across an array of catastrophes — a hurricane hitting the northeastern United States, an earthquake roiling Japan — will offer enough diversification to limit risk from any one incident.
Shareholder activism also offers a level of diversification as it allows participation in the equity markets, yet follows an appreciation path dominated by company-specific events, less related to the general market movements.
TIPS offer an additional level of diversification over and above nominal fixed income, in that they eliminate the risk of inflation for whatever portion of the portfolio they constitute.
A vigilant regulator would have prohibited or limited employer stock from 401k plans since employees are already dependent upon the employer company for their current incomes and, as a result, company stock does not offer adequate diversification.
