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Diversification Related News
 in chronological order

 See also: Diversification Related Books, Diversification Related Scholarly Papers, or Diversification Home Page.

Table of Contents:
 

Arab world offers unique diversification benefits

June 30, 2006
From Citywire:
The Middle East and North Africa (Mena) does not get the best press. Mention the region to the man on the street and he is likely to immediately think of bloody political conflict.

Given the region is blessed with an abundance of natural resources and has a thriving consumer society, it seems wrong the region has been neglected, especially when one considers the rapid rise of the Bric nations (Brazil, Russia, India and China).

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Investors seek diversification through funds

June 26, 2006
From Easier.com:
The majority of investors invest in funds to achieve a diversified portfolio (63 per cent), according to research from Barclays Stockbrokers. One in six (16 per cent) use funds because an expert manages their money and one in ten (10 per cent) because they believe it is easier than trading shares. Just over one in ten (11 per cent) invest in funds simply because they believe they generate good returns.

Chris Stevenson, Associate Director, Funds, at Barclays Stockbrokers says: "In current market conditions it is encouraging that the priority for investors is diversification as this is key to generating good returns and ensuring their portfolios weather market storms. The security that comes with knowing a professional is managing their money is obviously also a priority for funds investors and is likely to continue to be so. Funds are a great way for the more cautious investor to access a broad range of markets and sectors to suit their investment objectives."

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Growth and diversification

May 9, 2006
From WhatInvestment.co.uk:
The fund, due to be launched in early June, follows strong demand for multi-asset funds during a period that has been the most volatile and turbulent witnessed by managers in many years.

The launch will be the second multi-manager multi-asset fund to be offered to investors by Credit Suisse and will be a natural extension to the existing multi-manager range.

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Make diversification the key to adding funds to your holdings

May 8, 2006
From MarketWatch:
Karin Anderson, mutual fund analyst at Morningstar, says investors need to choose funds as much for the way they diversify a portfolio as for past results or their promise for the future. In a radio interview, Anderson said that investors should not just be looking for buy recommendations, but should be choosy to own funds that do not have significant overlap, keeping the number of holdings in a portfolio down and making the money easier to manage.

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Schroders opens up Diversified Growth fund strategy

April 24, 2006
From FTAdviser.com:
The new Diversified Target Return fund is an actively managed fund of funds, which will take a multi-asset growth approach, in a bid to provide stable returns even during volatile markets.

It will be managed by Johanna Kyrklund, head of the UK multi-asset team at Schroders, and co-manager of the institutional vehicle, who will aim to generate equity-like returns, but with a lower level of risk.

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Craig Israelsen: Commodities Provide Good Diversification

April 23, 2006
From Seeking Alpha:
There's a new study out by Professor Craig Israelsen at BYU that provides more good news about commodities as an asset class.

As a number of other reports have also done in recent years, it dismisses the notion that commodities should be viewed as some sort of a "No Go Zone" for individual investors. Instead, in this report, commodities are shown to provide good diversification for typical investment portfolios while boosting overall returns.

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4 ways to ace falling markets

April 14, 2006
From Rediff:
Investing in rising equity markets is always easier than investing in falling markets. Since a rising tide lifts all boats, rising equity markets can make even mediocre investments appear like great investments. But when markets collapse like they did earlier this year, many of these 'great' investments suddenly start appearing like great mistakes. Nonetheless, there are lessons to be learnt from falling markets and we have a 4-step strategy on how you can ace falling markets.

In rising markets investors are usually exuberant and expect markets to continue in the same vein. This is when most investors make mistakes. Two of the more common investment mistakes are 1) investing mainly in equities (i.e. lack of diversification) and 2) add to existing equity investments which results in lop-sided asset allocation (i.e. perilously high allocation to equities).

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What Is Diversification Worth?

April 11, 2006
From Seeking Alpha:
The concept of diversification is often discussed, but I am increasingly of the opinion that many investors do not understand diversification at a deep level. This is unfortunate, because diversification is the one ‘free lunch’ in investing. Indeed, this was the genius of Harry Markowitz in showing that combining asset classes in a thoughtful way allowed investors to generate higher returns without increasing risk in their portfolios. On a practical basis, what does this mean for investors? How much more return can investors generate by being well diversified?

To explore this topic, I have used a variety of sources to estimate what I will call the diversification premium. The diversification premium is the additional return that investors can achieve by effectively diversifying their portfolios across a range of asset classes. Effective diversification requires something significantly more intelligent than just buying a bunch of funds or ETFs, but it is well worth the effort.

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Rediscovering diversification amid global turbulence
March 12, 2006
From AsianInvestor.net:
 Distributors are taking a harder look at investment products that offer broad diversification, or so says AllianceBernstein, which hopes to find an opening for target-return retirement products for Asia’s growing retail market.

Consumer and private banks in Asia are taking a harder look at investment products that offer broad diversification rather than chase a hot theme, says Ranji Nagaswami, New York-based chief investment officer at AllianceBernstein.

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The Case Against Diversification and Holding Cash
March 10, 2006
From Seeking Alpha:
 Diversification, cash and AAA-rated instruments with exposure to Mortgage Backed Securities – If you’re deep into all three, these are three definite signs that it is time to let your advisor go. Many “professional” advisors today argue that diversification is a reason to stay fully invested through bear markets. After all, if your advisor had diversified your portfolio into a bunch of housing and financial stocks that are all sitting on 40% to 70% losses right now, he or she would probably tell you that the bottom is certain to be near and that the worst performers of your portfolio this year will be the best performers of your portfolio in the years to come. Well, here’s a news flash. The time to sell out of these stocks was 9 months ago, and if you’re still holding on, the odds are that you will be hurt even more.

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Fixed income looks towards global diversification
March 4, 2006
From Global Pensions:
 Heather Dale examines how fixed income has fared through recent market events and how pension funds are now using this core asset class

Over the last six months, volatility in the markets has made investors nervous, at a time when pension funds are grappling with ever more complex investment decisions and stricter accounting standards.

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Diversification drives profits at HSBC: Fitch Ratings
March 3, 2006
From Investment Executive:
 The business diversification of HSBC Holdings plc is enabling it to deliver earnings despite the huge hit it’s taking in the US mortgage business, says Fitch Ratings.

HSBC announced today that underlying pre-tax profits were flat at US$23 billion in 2007, despite US$17 billion of loan impairment charges largely in HSBC Finance and US$2 billion of other writedowns and fair value adjustments mainly due to structured credit exposures. Earnings were inflated, however, by US$3 billion of fair value ‘gains’ on its own debt, it added.

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Changes in the Dow: Big Headlines But Little Impact
February 11, 2006
From Yahoo! Finance:
 Changes only come to the Dow Jones Industrial Average every few years, so they're bound to make waves when they happen.

But at a time when diversification is widely considered the lynchpin of a successful portfolio the time also may be coming when a narrow look at 30 stocks that aren't even necessarily industrial in nature is increasingly irrelevant.

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Finding the best route to diversification
February 8, 2006
From Global Pensions:
 Andrew Gibson argues well diversified multiple strategy funds of hedge funds are the best way for pension funds to access hedge funds in these turbulent times

Reactions to the problems across the financial sector have raised fears the hedge fund industry is about to experience a general meltdown, however, as Mark Twain once said: “Reports of my death are seriously exaggerated.”

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Beginner's Guide to Diversification
January 7, 2006
From TheStreet.com:
 Remember, when you're on safari, you've got to pay attention to the clues. Many beginning investors, unfortunately, get so dazzled by the glitter of the stock market that they lose sight of the trees in the midst of the jungle. We'd like to tell you what happened to one beginning investor -- and how to avoid repeating his mistake.

John, a 38-year-old accountant, decided to go into the investing jungle without a guide. He was good at crunching numbers at work, and if he applied that same skill to investing in the stock market, he'd have a chance to win big. After all, a lot of other professionals he knew had made a few bucks in the market.

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Investing Blasphemy: Don't Diversify
January 3, 2006
From Forbes:
 Paul Orfalea is fairly well known for being the hyperactive, dyslexic mind that turned office- and print-service shop Kinko's into a worldwide chain, eventually bought by FedEx (nyse: FDX - news - people ) in 2004. Now much of his time is spent working as an investment adviser heading West Coast Asset Management, based in Ventura, Calif. With his three West Coast colleagues, Lance Helfert, Atticus Lowe and Dean Zatkowsky, Paul has released The Entrepreneurial Investor, which takes a whack at teaching investment strategy.

The Entrepreneurial Investor is simple and at times so accessible it might seem to encourage investors who belong in index funds to take on too much risk by following the authors into the realm of the highly concentrated individual stock portfolio.

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'Don't diversify your portfolio too much'
December 25, 2006
From The Times of India:
 Neerav Verma, a 30-year-old investor is extremely serious about money. He regularly invests in equity schemes of mutual funds to make money from the stock market. He tracks new fund offers regularly and invests in the new issues without fail. He closely follows the performance of various mutual fund schemes and makes it a point to invest at least a small amount in the best performing scheme every month. In short, he walks and breathes mutual funds. And, hold your breath, his portfolio of mutual fund comprises 45 schemes, ranging from diversified equity schemes to infrastructure to banking.

How does he keep track of the performance of the schemes he has in his portfolio? "I nearly spent around two hours daily to keep track of them. If I find any of the schemes not performing well, I take prompt action. I sell them and get into a scheme which is performing well at the moment," he says. Doesn't he know he is committing many sins, which are considered sure ways to lose money in the market? One, he is far too diversified to be effective. Two, he is also constantly changing his portfolio based on short term trends. "But if I don't put money in the best performing scheme, how will I make money. There is no point in keeping money in a badly performing scheme," argues Verma.

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Dial D for diversification
December 23, 2006
From The Economic Times:
 Check out the speed. After charting out a high-octane growth curve, India Inc is changing gears and getting into a diversification mode, spotting the booming business domains. In fact, in an aggressive hunt for growth areas, many Indian companies of various sizes and scales have made a serious attempt to join the bandwagon and branch out to new businesses.

The hot and happening sectors are a few in numbers. Backed by encouraging government policies and strong future outlook, sectors such as telecom, power, roads, financial services, retail and education have taken a lead in India’s new chapter on diversification. Already, the companies with sound track records in raising capital both from equity and debt markets, have spotted those buzzing sectors which in turn may help their top-line to grow on a sustained basis at least for a few more years.

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Latest exchange-traded funds offer great new ways to diversify
December 20, 2006
From HeraldTribune.com:
 The hype is finally justified.

Wall Street has rolled out some 600 exchange-traded index funds, those stock-market-listed products that have exploded in popularity. Many, however, merely mimic existing mutual funds -- or are so narrowly focused that they're of little use to prudent investors.

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Diversification is key for investors in '08, analysts say
December 17, 2006
From The South Florida Sun-Sentinel:
 Each year, we ask a panel of investment experts that question.

Amid relentless volatility, all passed the test in 2007. The recommended portfolio mix from every participant 12 months ago produced an increase this year.

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Diversify, Otherwise You May Sink
December 9, 2006
From The Korea Times:
 Seoul stocks are expected to lose some luster next year in line with receding global appetite for stocks amid the U.S. subprime meltdown. It's time for investors to diversify their portfolios, says Lee Won-il, CEO of Allianz Global Investors Korea.

"I believe the risk tolerance, which has been very high especially among retail investors, will subside, slowing down investments in stocks,'' said Lee in an interview with The Korea Times.

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Sound investing through diversification
December 2, 2006
From The Jamaican Observer:
 There is investment wisdom to be found in the saying 'Don't put all your eggs in one basket.' The concept of diversifying holdings in one's portfolio is well known and regarded by many to play the most important role in achieving financial goals while minimising risk.

Unfortunately, the old saying stops short of answering questions such as 'What baskets?' and 'How many eggs should I put in each?'. Investors therefore, require more intimate knowledge of diversification in order to achieve their financial goals.

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India's domestic banks need to diversify to stay competitive post 2009 -minister
November 26, 2006
From Forbes:
 The Indian banking sector will see increased competition between domestic and international banks after 2009, when the government is due to review the nation's financial sector, said Pawan Kumar Bansal, minister of state in India's finance ministry.

Speaking at a banking conference in Mumbai, Bansal urged domestic banks to raise a larger capital base for better market and operational risk management in order to stay competitive.

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The investment 'Holy Grail'?
November 13, 2006
From Moneyextra:
 Research from independent property consultancy and fund manager Seven Dials suggests that European commercial property markets offer far greater opportunities for portfolio risk diversification than the UK.

As investors head for the exit doors from many domestic commercial property funds, following a sharp fall in returns, latest Seven Dials analysis suggests that UK direct property is currently not offering great diversification benefits against UK equities.

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Portfolio Diversification, Truth vs. Myth
November 12, 2006
From FXStreet.com:
 Are you like many investors who go to sleep each night feeling safe and secure because their investment portfolios are properly diversified? Conventional diversification attempts to decrease risk and offer more opportunity for the average investor. However, when we observe conventional diversification protocol through the objective eyes of pure supply and demand, it becomes quite clear that conventional diversification actually increases risk and decreases opportunity.

The Foundation: Quantify Supply and Demand

As I have repeated so many times, the movement of price in any and all free markets is a function of the laws of pure supply and demand. Low risk/high reward buying and selling opportunity emerges when this simple and straight forward relationship is out of balance. Let's review the chart below to refresh how and why we quantify supply and demand as this will lead us to our objective opportunities for low risk gains and how to properly diversify.

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The Dangers of Diversification
November 6, 2006
From The Motley Fool:
 Chocolate. Power. Beer. In small doses, these are good things. However, history teaches us that too much of a good thing can be dangerous -- for your waistline, ego, and liver, respectively.

What's true for chocolate also is true for diversification. Small amounts of each can be beneficial, but go too far and you'll only wind up feeling bloated.

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Diversification of funds could drive down returns
November 6, 2006
From Cayman Net News:
 Worldwide, 40 percent of fund managers have diversified into ‘long only’ funds and 30 percent into alternatives in the last three years, causing convergence in investment strategies used in different sectors in their industry, and in cash terms alternatives have attracted larger sums, according to a new study published by KPMG International and CREATE-Research.

It shows that as hedge fund managers and private equity firms have fuelled competition by promising absolute returns that are not correlated to conditions in the financial markets, long only managers have responded by offering products that mimic the returns offered by their new competitors.

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Cofunds add Macquarie managed funds to platform
November 1, 2006
From FTAdviser:
 The funds include Macquarie’s Global Infrastructure Securities Fund a portfolio of infrastructure securities; the Global Private Equity Securities Fund made up of equity securities and its Global Property Securities Fund dedicated to investing in property securities.

The funds are "designed to meet the growing demand from investors for diversification alternatives and offer a range of income and growth returns".

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Convergence issues
October 29, 2006
From Global Pensions:
 Diversification in the market has lead to convergence as traditional managers look to out perform alternatives according to a study by KPMG and CREATE-Research.

The study showed how managers which stuck to their original remits had been creating better returns and generating benefits to investors.

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Diversification and Volatility: What's New?

October 25, 2006
From SeekingAlpha:
 The last few months have been a roller coaster if you look at the markets through the prism of return. But what's the view if we survey the investment landscape via volatility and correlation? Has the world really changed all that much by these metrics?

Let's start with volatility, which we define as the standard deviation of monthly total returns for the trailing 36 months. Graphing that measure of risk on a rolling basis for each of the major asset classes over time reveals that the great decline in volatility in recent years remains intact, as our chart below illustrates.

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Are You in the Right Stocks?

October 23, 2006
From The Motley Fool:
 One thing that often gets lost in all the talk of sizzling stocks and 20-baggers is the benefit of diversification. It's a concept every investor can understand and profit from.

And don't think diversification automatically means mediocre returns. David and Tom Gardner have led Motley Fool Stock Advisor members through a variety of industries, and even some international exposure, on the way to outsized performance (77% total average returns versus 32% in the S&P 500). So it can be done.

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INTERVIEW-Japan Post Bank eyes long-term fund diversification

October 19, 2006
From Reuters:
 Japan Post Bank plans to diversify risk allocations over the medium to long term, eyeing credit products such as corporate bonds as well as domestic and overseas stocks and foreign bonds, a senior official said on Friday.

But the bank, one of four business units created within state-owned Japan Post [JP.UL] on Oct. 1 to kick off a 10-year privatisation process, does not plan to alter its fund allocations drastically right away just because it has begun the process of privatisation and faces pressure to pursue profitability, he said.

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With Inflation Up and Housing Down, Diversification's Still Your Only Friend

October 17, 2006
From SeekingAlpha:
 As economic reports go, this morning's updates don't easily lend themselves to positive spins.

On the inflation front, today the government advised that pricing pressures are again bubbling. As a result, consumer prices rose at an annual pace of 2.8% through September. That equals the previous annual peak (set back in March of this year), and is the highest since August 2006.

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Why a one-stock strategy can beat safety in numbers

October 12, 2006
From The Age:
 CAPTAIN Cook, the first of a long line of English captains to conquer Australia, will tell you. Discover any group of humans, no matter how remote, and they will have a god and a religion.

It was not someone's idea; it is a human need, to huddle under an omnipotent being and a creed. To have all the biggest questions in life, any question in life, answered, not by logic, but by a guru and his teachings.

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Help investors diversify intelligently

October 8, 2006
From InvestmentNews:
 Financial planners and investment advisers apparently are doing their jobs well — their clients and other individual investors are diversifying their investments as never before.

That is the implication of the report in InvestmentNews last week that said net new cash flows into stock funds have declined significantly since the all-time peak reached in January 2000.

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A diversified portfolio can safeguard holdings, despite dollar's wild ride

October 5, 2006
From TheStar.com:
 I assume most of us working-class Canadians are well aware of the loonie's rise against the U.S. dollar. The magnitude of the advance has been dramatic, about 50 per cent in three years. But I wonder if any of us are any better off.

The direct beneficiaries are easy to spot. They would include importers like Canada's Buck Or Two, Wal-Mart Canada Corp. and Canadian Tire Corp. Ltd. because most of the goods they sell are made outside of Canada. When the loonie rises their import costs decline.

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Find the Bond Mix that Suits You Best

October 5, 2006
From Morningstar:
 The principle of investment diversification has been an objective of mutual funds since their origin. In fact, one study points out that the world's first mutual fund (a closed-end fixed-income fund launched in Amsterdam in July 1774) had diversification among different investment types as an explicit requirement. Beyond not wanting to have too much capital at risk in any single investment, diversification functions due to distinct asset classes often behaving differently. For instance, stock and bond returns aren't well correlated, so the combination of the two asset classes can lower portfolio volatility (an aspect of risk) while not excessively sacrificing return.

But why sacrifice any return potential at all? If investors were not risk-averse, then perhaps it would make sense to stick solely to stocks. However, our internal research suggests that investors are quite risk-averse, and tend to fare poorly in volatile investments. Our studies of Morningstar Investor Returns, also known as asset-weighted returns, indicate that the average return experienced by the typical investor in volatile funds is worse over time than in funds that are less volatile, and this seems to be the case among categories as well as within them, a fact that strongly argues for volatility reduction in investors' portfolios. To that end, we'll examine different types of diversification within the fixed-income universe, such as credit quality, interest-rate exposure, and country and currency, with an eye toward showing investors how to diversify from core intermediate-term bond funds to achieve better actual results.

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How Many Is Too Many?

September 27, 2006
From Fool.co.uk:
 With the banking sector down from its peak in February, not having too many eggs in one basket sounds appealing. But how diversified should your portfolio be?

I don't believe there's one clear answer to that question, as it depends on each individual's circumstances, strengths and weaknesses. But regardless of these factors, I see absolutely no point in buying a selection of shares that approximates to the market -- for a fraction of the expense and effort you can get the same exposure from a tracker fund or ETF.

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Introduction To Diversification

September 26, 2006
From The International Business Times:
 Diversification is a familiar term to most investors. In the most general sense, it can be summed up with this phrase: "Dont put all of your eggs in one basket." While that sentiment certainly captures the essence of the issue, it provides little guidance on the practical implications of the role diversification plays in an investor's portfolio and offers no insight into how a diversified portfolio is actually created. In this article, we'll provide an overview of diversification and give you some insight into how you can make it work to your advantage.

What Is Diversification?
Taking a closer look at the concept of diversification, the idea is to create a portfolio that includes multiple investments in order to reduce risk . Consider, for example, an investment that consists of only the stock issued by a single company. If that company's stock suffers a serious downturn, your portfolio will sustain the full brunt of the decline. By splitting your investment between the stocks of two different companies, you reduce the potential risk to your portfolio.

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Are You in the Right Stocks?

September 20, 2006
From The Motley Fool:
 One thing that often gets lost in all the talk of sizzling stocks and 20-baggers is the benefit of diversification. It's a concept every investor can understand and profit from.

Don't think diversification automatically means mediocre returns. David and Tom Gardner have led Motley Fool Stock Advisor members through a variety of industries, and even some international exposure, on the way to outsized performance -- 74% total average returns, versus 35% in the S&P 500. So it can be done.

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Legal Tender: Diversified Assets

September 20, 2006
From The Blog of Legal Times:
 A new report in this month's Journal of Financial Planning suggests what asset classes may give the most diversification benefits to an investment portfolio.

A study by William Coaker II examined the correlation among returns of different asset classes. It found that natural resources and foreign bonds have high diversification benefits, even though they are often neglected in putting together a portfolio. But returns from growth U.S. stocks are highly correlated with returns from broader indexes (so-called "blend" styles), and using these two groups together does little to reduce risk.

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S&P Comments on Reinsurer's Diversification Efforts

September 12, 2006
From InsuranceJournal.com:
 In a new report, issued as one of several in conjunction with the annual Reinsurance Rendezvous in Monte Carlo, Standard & Poor's Ratings Services examines the efforts of global reinsurers to diversify their portfolios.

The report titled "Reinsurer Diversification: A Means To An End, Not An End In Itself," notes that such initiatives are often a useful by-product of a well-constructed portfolio of risks built around their core competencies." However, S&P cautions, "the pursuit of diversification as an end in itself is more likely to be detrimental than beneficial to an entity's long-term financial strength."

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First GAIM Middle East conference to focus on investment diversification

September 10, 2006
From Al Bawaba:
 It has been revealed that the forthcoming GAIM Middle East conference will highlight the importance of investment portfolio diversification. The Middle East’s inaugural alternative investment conference runs from 26th – 28th November at the Jumeirah Beach Hotel, Dubai, UAE and will outline the need for regional investors to diversify, especially in light of the recent stock market turbulence witnessed around the world.

Assets currently under management in the Middle East and North Africa are approximately USD 70 billion and Algebra Capital analysts predict that the market will grow by at least 23.5 per cent per annum, meaning that assets managed will reach in excess of USD 200 billion by 2012. However, the region’s emerging status means that this is an ideal time for investors to incorporate diversification strategies in order to manage periods of market weakness.

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The Closest Thing to a Free Lunch

September 6, 2006
From The Motley Fool:
 Getting some international exposure in your portfolio may be one of the best things you can do as an investor. Why? Because such exposure -- whether through individual stocks, mutual funds, or exchange-traded funds -- generally provides you the same or even higher potential returns but at lower risk.

Burton Malkiel, a Princeton professor, drove this point home for me many years ago in his book A Random Walk Down Wall Street. I never forgot this paragraph, concerning his 21-year research period from 1977 to 1997.

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A world tour for your portfolio

September 5, 2006
From The Sydney Morning Herald:
 Parochial investors who ignore foreign equities may be missing out on diversification.

Australian investors are playing it safe, continuing to invest heavily in the local sharemarket at the expense of international equities, according to a recent survey.

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Why I Own Fortress Investment Group

August 30, 2006
From SeekingAlpha:
 On Wednesday, my portfolio reminded me of a famous Edward Hopper painting called Nighthawks. The painting is almost entirely green except for a small lady in the middle wearing a bright red dress.

16 of the 17 names in my portfolio were up (green), and my little lady in red is Fortress Investment Group (FIG). FIG was down 0.63%, but I'm happy to continue holding her as she provides important diversification and has other positive characteristics.

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Wall Street Looks To Diversify

August 29, 2006
From Financial-Planning.com:
 The golf course has long been known as magical broker of business deals. But diversity initiatives? Not so much until now. What started out as a conversation on the green between Chris Davis, president of Money Management Institute (MMI) and Charles Widger, chairman and CEO of Brinker Capital and treasurer of the Money Management Institute turned into a program that offers African American undergrads from historically black colleges and universities (HBCUs) internships in the nation’s premier financial services companies. “Chris Davis and I were on a golf course waiting for the rain to pass,” says Widger. “We thought of a way we could put qualified young people into an industry that needs to diversify.”

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A 3-D Take on the Market: Defense, Diversification and Discipline

August 19, 2006
From The Washington Post:
 The recent stock market plunge has whiplashed many investors and left them wondering what to do about their portfolios.

But in times like these, don't panic. Instead, you want to think about the three D's, says Erik Davidson, a chartered financial analyst and senior director of investments at Wells Fargo Private Bank in Denver.

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Diversify – into cash

August 19, 2006
From Times Online:
 FOR investors, one of the big themes of the past few years has been diversification. Awed by the well-publicised success of Yale University’s money manager, David Swensen, who has returned an average of 16%-17% per annum every year since 1987, institutional investors around the world have concluded that his strategy is the best ever.

So they have taken large parts of their cash out of straight equity funds and, just like Swensen, they’ve poured it into “alternative investments” instead � hedge funds, venture capital, private equity, commodities and property.

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Diversification key in getting to the finish line profitably

August 13, 2006
From The New York Daily News:
 With volatility rising in the financial markets, many market participants will again discuss the benefits of diversification. We have always championed the merits of diversification, and think that this is a good time to review four of our most important points. ...

1 Diversification is a risk-reduction tool and NOT a return-enhancement tool. Investors sometimes find new investments attractive because they seem to offer superior returns and reduced risk. Investors need to keep in mind how rare such assets actually are within the financial markets, and investors are often disappointed when their investments return less than was expected. The key to diversification is not gaining higher returns, it is enhancing your ability to sleep at night.

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Why Diversification Can Leave You Behind

August 13, 2006
From The Motley Fool:
 Warren Buffett believes that "diversification is an excuse for ignorance." What he means is that when a good investment idea comes across your plate, you have to have the conviction to swing big.

If you don't have the courage to make a significant investment by putting, say, 10% of your assets into one investment, then you probably don't need to invest even 1% of your assets. Either you are confident in your analysis, or you aren't. If you can't invest big, you shouldn't invest little.

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The Closest Thing to a Free Lunch

August 8, 2006
From The Motley Fool:
 Getting some international exposure in your portfolio may be one of the best things you can do as an investor. Why? Because such exposure -- whether through individual stocks, mutual funds, or exchange-traded funds -- generally provides you the same or even higher potential returns but at lower risk.

Burton Malkiel, a Princeton professor, drove this point home for me many years ago in his book A Random Walk Down Wall Street. I never forgot this paragraph, concerning his 21-year research period from 1977 to 1997:

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ETFs Provide Diversification and Flexibility

August 8, 2006
From SeekingAlpha:
 The allure of an all-exchange traded fund portfolio is appealing to many investors. With more than 500 different products available on the market, a well-diversified approach using only ETFs is possible.

ETFs are popular with do-it-yourself investors and professional money managers alike. They like that the products can cut down "bleeding" during down times and amp up returns during market rebounds, reports Rob Wherry for The Wall Street Journal. Along with tax advantages and low costs, ETFs are based upon published indexes available in real time so investors know exactly what they're getting.

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Bringing sophistication in managing risk

July 30, 2006
From GulfNews.com:
 An interesting decoupling phenomenon has been in play in global markets over the past few months - one that might offer clues as to whether asset class diversification will continue to work well for long-term investors.

The decoupling that has attracted the most attention is the resilience of global equity valuations in the face of surging oil prices. This has offered the message that global demand can shrug off the higher cost of a raw material that features prominently in a broad range of consumer products.

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"Exotic" investments used for portfolio diversification

July 26, 2006
From The London Stock Exchange:
 Experienced investors are more likely than novices to opt for alternative investments, according to one expert, who explained seasoned investors use "exotic" assets to diversify their portfolio.

Justin Williams is the co-founder of the first art-trading hedge fund and he explained that experienced investors always employ a strategy when it comes to their portfolio.

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Use foreign stocks to diversify — experts

July 21, 2006
From The Chronicle Herald:
 Canadian investors worried about the disappearance of blue chip names such as BCE Inc. and Alcan from their portfolios should remember to look outside the country for places to diversify their holdings, investment professionals suggest.

Adrian Mastracci of KCM Wealth Management says investors should hold a diversified basket of stocks and that means not just Canadian companies.

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KLM in bond diversification

July 18, 2006
From Global Pensions:
 Diversification was the main reason the cabin staff and pilots KLM pension funds allocated 5% of their fixed income portfolios to long term UK corporate bonds, according to Blue Sky Group.

Justus-van halewijn, head of investment strategy and research at Blue Sky Group which manages the funds, said the new mandates would follow a passive investment style.

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BNP Paribas ratings upped to 'AA+' on diversification, profitability - S&P

July 12, 2006
From CNNMoney.com:
 Standard & Poor's (NYSE:MHP) Ratings Services said it has raised its long-term counterparty credit rating on French bank BNP Paribas (OOTC:BPRBF) to 'AA+' from 'AA', reflecting the group's increased internationalisation, strong profitability measures, and earnings generation capacity. At the same time, S&P affirmed its 'A-1+' short-term counterparty credit rating on the bank. The outlook is stable.

'BNP Paribas boasts superior diversification, as well as strong and durable franchises in each of its key business lines,' said S&P's credit analyst Sylvie Dalmaz. 'The group's diversification, both by business line and geographically, is a key rating strength,' she said.

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Commentary: Diversification paid off in strong first half for global markets

July 9, 2006
From MarketWatch:
 It's time to dissect the first-half performance of the world's stock markets. This isn't an academic exercise, because having a sense of where the markets are headed depends to a large extent on understanding where they've been.

We'll use the Dow Jones Wilshire Global Total Market Index, which tracks nearly 12,800 stocks in 57 countries. The Dow Jones Wilshire 5000, including virtually every exchange-listed stock in the United States, is the U.S. component.

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Diversification In 2007

June 30, 2006
From GuruFocus.com:
 With all the talk of the need for diversification in today’s marketplace, a lot of people are turning to mutual funds. A mutual fund is a collection of companies from different sectors, industries, market caps, and often countries that make up one share.

If a person buys one share of a mutual fund, they would potentially own a piece of approximately 100 companies. To some people this is considered diversification as they own a piece of many companies instead of just one or a few. And this may well be the case, depending on what that particular person is looking to receive from their investments.

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Diversify investments for optimal results

June 29, 2006
From The Birmingham Business Journal:
 "Don't put all of your eggs in one basket" is not just a saying; it is one of the oldest tenets of investing.

As an investment strategy, diversification is more than simply owning a large number of individual securities or mutual funds.

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Are You in the Right Stocks?

June 16, 2006
From The Motley Fool:
 One thing that often gets lost in all the talk of sizzling stocks and 20-baggers is the benefit of diversification. It's a concept every investor can understand and profit from.

And don't think diversification automatically means mediocre returns. David and Tom Gardner have led Motley Fool Stock Advisor members through a variety of industries, and even some international exposure, on the way to outsized performance (73% total average returns versus 36% in the S&P 500). So it can be done.

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Avoiding the diversification trap

June 15, 2006
From The Globe and Mail:
 The Canadian stock market is heavily focused on energy, materials and financial stocks, and so are many popular Canadian equity funds and exchange-traded funds. Here are some tips for limiting the damage from a pullback in these sectors.

DON'T own equity funds or exchange-traded funds that mirror each other in having the same heavy weightings in commodity and financial stocks as the S&P/TSX composite index.

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US foundation returns up on diversification-survey

June 12, 2006
From Reuters:
 U.S. foundations posted an average annual returns of 13.7 percent in 2006, up from 7.9 percent the year before, due to rising markets and allocation to alternative assets, according to a survey released on Tuesday.

The Commonfund Institute, which tracks foundations and other investment funds, also found that bigger institutions did better, producing returns of 15.6 percent for 2006, compared to 12.4 percent for the smallest.

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Avoiding diversification in favor of focus on best ideas

June 11, 2006
From InvestmentNews:
 From Geoff McDonald’s perspective, diversification equals dilution and, ultimately, increased risk.

He manages the $290 million AIM Trimark Endeavor Fund (ATDAX) for AIM Trimark Investments, a Toronto-based subsidiary of Invesco PLC in London.

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Foreign Market Diversification: Beware the Correlations

June 5, 2006
From SeekingAlpha:
 There was an article in the New York Times about the need to invest in foreign markets beyond just Western Europe in order to have a chance at diversification. This is something I have been writing about for a couple of years -- maybe someone at the Times has been reading this blog? Actually I am fairly certain no one there does.

The article points out that the iShares MSCI EAFE Index Fund ETF (EFA) has a 0.85 correlation to the S&P 500 -- another point I have been making all along. The suggestion in the article was to add a little Japan to your EAFE, because Japan only has a 0.29 correlation to the SPX (according to the article).

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JPMorgan sees big changes in asset allocations

June 5, 2006
From Reuters:
 Investment portfolio construction has gone through big changes in the last decade to meet growing investor interest in "alternative" strategies such as hedge funds, senior JPMorgan Chase & Co. (JPM.N: Quote, Profile, Research executives said on Tuesday.

A decade ago, a typical pension fund might invest 70 percent of their assets in equities and 30 percent in fixed income instruments. Now a model portfolio might include as much as half its assets in alternative assets, according to James Staley, chief executive of JPMorgan Asset Management.

While there is no one-size-fits-all portfolio, alternatives -- which also include real estate, private equity and structured products -- are clearly attracting exponentially more interest among pension funds as a diversification strategy, Staley said at a New York news conference.

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Diversification Pays Off for the Holiday Portfolio

May 28, 2006
From TheStreet.com:
 Let the summer fun begin.

On this Memorial Day, it's time once again to take a look at TheStreet.com's Holiday Portfolio.

Given the stock market's impressive strength, I'd expect the performance of this diversified basket of five equities to correlate roughly with market averages. And, well, that's essentially what happened.

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Concentration v/s Diversification – What to choose?

May 22, 2006
From Moneycontrol India:
 Diversification is a strategy to reduce the risk (downside) whereas concentration is a strategy to enhance returns (upside).

In order to meet various goals in life, one needs to generate enough money such that the money is available at the appropriate times. Professional income is generally the major source through which one earns money and the surplus after taking care of regular expenses is accumulated to meet long tem goals. This surplus needs to be invested prudently.

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Concentration v/s Diversification – What to choose?

May 22, 2006
From Moneycontrol India:
 Diversification is a strategy to reduce the risk (downside) whereas concentration is a strategy to enhance returns (upside).

In order to meet various goals in life, one needs to generate enough money such that the money is available at the appropriate times. Professional income is generally the major source through which one earns money and the surplus after taking care of regular expenses is accumulated to meet long tem goals. This surplus needs to be invested prudently.

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Are You in the Right Stocks?

May 20, 2006
From The Motley Fool:
 One thing that often gets lost in all the talk of sizzling stocks and 20-baggers is the benefit of diversification. It's a concept every investor can understand and profit from.

And don't think diversification automatically means mediocre returns. David and Tom Gardner have led Motley Fool Stock Advisor members through a variety of industries, and even some international exposure, on the way to outsized performance (71% total average returns versus 36% in the S&P 500). So it can be done.

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‘REMFs will allow greater diversification across cities’

May 20, 2006
From The Financial Express:
 While the RBI has asked banks to slow their exposure on the real estate sector sensing a bubble, the sector continues gets a slow and steady flow of investments from private equity players. Anuj Puri, MD, Trammell Crow Meghraj, advises investors to reposition, redevelop, and efficiently refinance their portfolios, which ensures converting a sub-performing asset to a stabilised asset. Excerpts:

The RBI recently asked banks to slow down their exposure to the real estate sector. What impact do you see of this on the property prices or on real estate developers?

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Diversify or 'Diworsify': Isn't Diversification Supposed to Reduce Risk?

May 14, 2006
From SeekingAlpha:
 I think for small investors like me, one common mistake is to “diversify". Wait, isn't "diversify”the first lesson we are taught to reduce risk? Yes, but as Peter Lynch said, "diversify”could mean "diworsify”too.

For example, I have six stocks in my portfolio now: Crocs (CROX), Home Inns & Hotels Management Inc (HMIN), Mindray Medical International Limited (MR), GSI Technology, Inc. (GSIT), Ninetowns Internet Technlgy (NINE) and Starbucks Corporation(SBUX). Some are winners (CROX), some are losers (NINE). Had I held all in CROX, my return would be much better. Of course you would say I had more risk too.

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SBI eyes new areas for diversification

May 12, 2006
From The Financial Express:
 State Bank of India (SBI) has identified new areas for diversification for which its had earmarked Rs 5,000 crore, a top bank official said.

The bank planned to enter into the areas of private equity, infrastructure fund and venture capital and was in talks with various parties in this regard, SBI Chairman O P Bhatt said.

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Investor appetite swells alternatives

May 4, 2006
From InvestorDaily:
 A survey of 5000 investors shows diversification is king.

The chase for double-digit returns is on as research shows people are increasingly open to non-mainstream investments.

The number of retail investors allocating funds to alternatives has doubled in the past five years, a survey by Macquarie Bank and research house Investment Trends shows.

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Barrick says share price may spark diversification

May 2, 2006
From Reuters Canada:
 Barrick Gold Corp. may consider expanding further into other non-gold precious or base metals production if its share price continues to underperform, company chairman and founder Peter Munk said on Wednesday.

Speaking at the company's annual meeting in Toronto, Munk said the stock's performance over the past five years has not reflected the company's profit performance and rich project pipeline as Barrick has risen to become the world's largest gold producer.

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IMFC Shutters Diversified Program, Preps Offshore Fund
April 25, 2006
From FINalternatives:
 Toronto-based futures shop Integrated Managed Futures Corp has been busy of late tweaking its product lineup. The firm in February ceased trading the IMFC Diversified program, which traded 29 futures markets, and replaced it with the IMFC Global Investment program, which trades 47 markets.

In addition, IMFC is planning to launch a Caymans-based version of its Canadian fund, IMFC LP, this summer, and is putting its planned launch of an emerging CTA fund of funds on hold for the time being.
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International Diversification Should Not Be Done Blindly
April 25, 2006
From SeekingAlpha:
 The Wall Street Journal had two bits on international diversification: a poll and an article. Both were good as far as they went, but the past outperformance of international over domestic stocks doesn’t help us analyze which will be better in the future. That macro question is hard, particularly because once a streak gets long, it gets more touchy to be long. But let’s look at a “micro” angle on foreign investing.

One of the reasons to invest abroad is to diversify currency risk. Let’s pretend for a moment that we know the dollar is going down over the next few years. What stocks would I buy? I would buy foreign companies that import US goods (costs are getting cheaper), foreign companies that are purely local (earnings stream rising in dollar terms), and US companies that export (sales should rise as the dollar falls).
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Diversification can still be found closer to home
April 16, 2006
From Scotsman.com:
 LIKE many investment trust investors saving for retirement, I have laboured under the illusion that equity risk could be cut by diversifying into overseas markets.

This is a wobbly proposition on several counts. For example, there is the currency risk. The South African precious metal mining market, for example, may look attractive.
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Hedge fund investors primarily seeking diversification
April 16, 2006
From Pensions & Investments:
 Diversification is the main reason a majority of institutions invest in hedge funds, according to a survey just released by SEI Investments Co., Oaks, Pa.

About 43% of institutional investors rated diversification their No. 1 reason for hedge fund investing, followed by absolute returns, 33%; lowered volatility, 18%; and use in a portable alpha program, 6%. The survey was conducted in the first quarter on behalf of SEI’s investment manager services division by Infovest21 LLC, New York, an information services company specializing in alternative investments.

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Some useful investment tips
April 11, 2006
From Rediff News:
 The recent correction in stock market gives investors a good opportunity to re-assess their expectations from their investment portfolios and also their tolerance to risk. When markets are in a bull run, investors are rarely aware of the risk they are exposing themselves to. But it becomes all too apparent in a crash! Being an optimist and believer of market cycles, helps maintain that it is never too late to correct ones mistakes.
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The wrong kind of diversification
April 8, 2006
From STLtoday.com:
 What is "diworsification?" You won't find the word or its definition in a Webster's dictionary. Still, many investors may be "diworsifying" their portfolio by adding investments and/or advisers that ultimately result in increasing the risk of their portfolio.

Probably the most common diversification error made by individual investors is purchasing several mutual funds that invest in the same asset class.
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Diversify to shrug off bad days like these
February 28, 2006
From The Toronto Star:
 How did you feel when you heard about yesterday's sharp stock market selloff?

A) You shrugged your shoulders and said to yourself, "The market is taking a break after hitting so many record highs this month."
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Central banks cutting holdings of U.S. dollar
February 26, 2006
From The International Herald Tribune:
 Central banks around the world are continuing to diversify their reserves by cutting their dollar holdings, according to a survey sponsored by Royal Bank of Scotland Group.

Italy, Russia, Sweden and Switzerland have made "major adjustments" in foreign-exchange holdings favoring the euro and the pound, according to the poll, which was conducted by Central Banking Publications between September and December 2006.
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For a winning portfolio, mix and match
February 19, 2006
From Delaware Online:
 If you mix a cocker spaniel with a poodle, you'll get a cockapoo. A Jack Russell terrier and a pug will produce a jug. Stir in a beagle, a bloodhound and a collie, and you'll get a mutt.

No disrespect to any breed, but mutts can often be healthier and smarter than purebreds. Similarly, mixing different types of income-producing investments can often produce a superior breed of income portfolio. Think of them as mixed-breed bond funds.
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Investors seek portfolio shifts as credit tightens
February 19, 2006
From Reuters Italia:
 Investors keen to diversify their portfolio away from an orthodox mix of equities and bonds are seeking alternative tools and strategies to reduce volatility as money globally becomes more expensive.

Investing in inflation, cash and currency volatility are some of the areas people are looking at in an environment where central banks are draining liquidity and making credit gradually more expensive, which could fan financial market volatility.
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Currency diversification may not be as scary as the market thinks
February 5, 2006
From MarketWatch:
 As the world's currency reserves approach the $5 trillion mark, it's hardly surprising that talk of central banks moving out of dollars and into other currencies sends shivers across the foreign-exchange market.

The U.S. dollar fell to a three-month low against the euro and a 19-month low versus the British pound last November after Chinese officials announced plans to diversify the world's most populous nation's trillion dollars worth of currency reserves.

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Diversification is the best protection
February 5, 2006
From The Vancouver Sun:
 It has to be right up there as the Holy Grail for all investors: A bulletproof strategy to protect your nest egg against everything from an 18-month recession to nuclear holocaust.

And like the Holy Grail, Santa Claus and affordable housing, it is pure myth. No such thing, say the experts.
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Are You Overdiversified?
January 23, 2006
From Morningstar:
 Anyone who has spent much time reading about personal finance, at Morningstar or elsewhere, knows the value of diversification in a portfolio. If you put all your money into just one or two investments--stocks, bonds, or anything else--you run the risk that something will go wrong and wipe out a big chunk of your nest egg. (Enron, anyone?) By spreading out your investments, you smooth out returns and lessen the effect that any one holding can have. Modern portfolio theory has shown that a diversified portfolio has a better expected return, for a given level of volatility, than a portfolio that's concentrated in just a few issues.
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Get ready-made diversification
January 22, 2006
From ThisIsMoney.co.uk:
 The stock market's strong run since March 2003 could fool some investors into believing the good days will never end. But as investors who piled money into technology stocks and funds in the late Nineties will testify, you shouldn't put all your eggs in one basket.

The mantra of financial advisers is diversification and they urge investors to build a balanced portfolio of asset classes, such as shares, property and bonds, to help spread risk. But this is easier said than done, particularly if you haven't got a large sum of money to invest or are a novice investor.

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Dollar drops on reserve diversification talk
December 27, 2006
From MarketWatch:
 The dollar fell against other major currencies Wednesday, after the United Arab Emirates said it's planning to diversify its foreign-exchange reserves away from the U.S. currency.

But the greenback slightly trimmed its losses after a U.S. government report showed sales of new homes rose more than forecast last month. The Commerce Department said sales of new homes rose 3.4% in November to a seasonally adjusted annual rate of 1.047 million homes. Economists surveyed by MarketWatch had expected a reading of 1.02 million homes. October's sales pace was revised upward to 1.013 million, from 1.004 million. See full story.

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Bank of China to limit forex exposure, diversify away from US dollar - report
December 25, 2006
From Forbes:
 Bank of China is diversifying its offshore assets away from the US dollar and reducing its overall foreign exchange exposure as the yuan continues to rise, the South China Morning Post reported, citing the bank's president Li Lihui.

'Our foreign exchange client assets and client liabilities are basically balanced and we don't have risks in that area. We face risks mostly in our proprietary assets,' Li said in an interview with the Hong Kong newspaper
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Experts: Diversity key to hedge fund health
December 1, 2006
From The ADVOCATE:
 Hedge fund "blow-ups" are inevitable. They are going to happen. The key for investors is to diversify their holdings and do their due diligence to minimize their risk.

That was the consensus of three industry experts during a panel discussion on hedge fund collapses Wednesday night at a meeting of the Stamford chapter of the Chartered Financial Analyst Society.
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The Diversification Dilemma
November 28, 2006
From The Motley Fool:
 Nary does a day go by without someone in the financial media pushing diversification. Whether it's in print, on TV, or on the radio, the phrase "diversification is good" is trumpeted in times of both market turmoil and exuberance.

But while diversification may be good for some portfolios, it could be exactly wrong for others. The trick is to learn how to properly diversify for your situation and tolerance to risk. In truth, avoiding an oversimplified approach to spreading investments thinly and embracing a lopsided portfolio gives investors a better chance to soundly beat the market.
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Middle Eastern investors tap Malaysian property in bid to diversify
November 22, 2006
From The International Herald Tribune:
 Middle Eastern investors interested in diversifying their risks are zeroing in on Malaysian real estate, property executives and bankers say.

Malaysia's growing infrastructure projects, relatively transparent laws on ownership and the availability of Islamic financing make the country attractive to Middle Easterners, who are familiar with Malaysia as a vacation destination.
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Diversify out of Aust equities: van Eyk
November 21, 2006
From FinancialStandard.com.au:
 On the back of recent research, van Eyk has warned planners they should be rebalancing their clients’ portfolios away from Australian equities while they will need to search harder for local managers who are actually able to add value.

Dr Jerome Lander, head of fund manager research and lead analyst at van Eyk, also explained the research bore out that there was high stock and sector specific risk currently present in the Australian index while the discount Australian equities have traded at to their international peers has been eroded.

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Fitch Comments on the Pursuit of Diversification Credit by Insurers
November 14, 2006
From BusinessWire:
 Fitch Ratings today commented on recent insurance industry and media observations that insurers are being 'forced' to diversify due to the capital charge benefits that can be obtained from diversification in rating agency capital models. Fitch believes that it is time to set the record straight.

In a Comment entitled 'In Pursuit of Diversification: Treatment in Economic Capital Models and Prism,' Fitch said there are material differences in the way that rating agencies assess insurers' capital adequacy. Fitch has established a transparent methodology in conjunction with the roll-out of Prism, its proprietary global economic capital model. Prism is the first global stochastic capital model to be developed by a rating agency in the insurance industry, and represents a quantum leap in the independent assessment of insurers' capital by a third party observer.

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Dollar Rises as Traders Bet on Slower Diversification by China
November 13, 2006
From Bloomberg:
 The dollar rose the most in more than a week against the euro and yen as traders bet comments by the head of China's central bank do not indicate a faster pace of U.S. currency sales in the near future.

People's Bank of China Governor Zhou Xiaochuan said Nov. 10 at a conference in Frankfurt that the Asian nation will maintain its policy of diversifying foreign-exchange reserves, the world's biggest at about $1 trillion, because of ``safety, efficiency and liquidity.'' When asked whether China is selling dollars, he said: ``No.''

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Private sales feed diversification concerns

November 7, 2006
From The National Post:
 As unprecedented amounts of capital are being raised by private-equity firms, mega-deals such as yesterday's US$3.7-billion proposed takeover of Toronto-based hotel chain Four Seasons Hotels Inc. are becoming the norm rather than the exception.

In a friendly deal announced yesterday, billionaires Bill Gates and Saudi Prince Alwaleed bin Talal have proposed taking the luxury hotel firm private. It's the latest in a round of recent big-ticket takeovers of Canadian companies by private-equity firms, including Prince Alwaleed's team-up with Colony Capital LLC to buy Fairmont Hotels & Resorts for US$3.9-billion, Jerry Zucker's purchase of retailer Hudsons Bay Co. for more than $1-billion, and the takeover of resort owner Intrawest Corp. by Fortress Investment Group for $2.8-billion.

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Diversification the key

November 6, 2006
From The Hamilton Spectator:
 Income trusts were a vehicle with many warts long before Finance Minister Jim Flaherty cut the tax advantage. For example, if Lakeport distributed all its profits to unit holders, what is the master plan when it's time for new equipment or other capital expenses? Companies that need to reinvest to grow should never have been converted to income trusts.

What amazes me is that people were apparently so heavily invested in this asset class. Why weren't they more diversified? Why weren't the financial advisers giving diversification advice? The reason the Bay Street crowd is unhappy is obvious -- Flaherty took away the money machine. But I bet within a couple of years the accountants and securities lawyers will come up with another "tax efficient" vehicle and the circle will start all over again.

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Two deals quicken TSX's plan to diversify

October 25, 2006
From The Globe and Mail:
TSX Group Inc. is jumping into the spate of takeovers in the securities sector, announcing two deals yesterday that will hasten its plans to expand beyond equity trading into the world of fixed-income products.

TSX Group, which operates the Toronto Stock Exchange, said it has agreed to buy bond brokerage firm Shorcan Brokers Ltd., which is currently owned by its employees. As well, TSX also completed a deal with Scotia Capital Inc. to buy its fixed-income indexes, PC Bond and related data assets.

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JPMorgan Asset Management urges people to diversify portfolios for retirement

October 23, 2006
From Easier.com:
 JPMorgan Asset Management has revealed the findings from its latest ‘Pensions Map’ report into the state of the UK’s retirement provision. The report shows that traditional pension schemes are falling out of favour with less than half (48%) of people of working age expecting formal pension schemes to be among their main sources of income in retirement.

And the reliance on pensions shows a continuing decline. 62% of people aged 55-64 said a pension would be one of their main sources of income in retirement but this falls to only 38% among 25-34 year olds. It seems that the younger generations are rapidly losing faith in traditional pension schemes.

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Dialing Overseas for Diversification

October 19, 2006
From TheStreet.com:
Among the bushels of new ETFs that have been listed on the U.S. market lately are 10 foreign-sector ETFs from WisdomTree. The sector funds weight their holdings in a similar manner as WisdomTree's other funds, keying off of dividends. These are unique, in that they own no domestic stocks, unlike some putatively foreign-focused funds. They have been in the works for a while, and I believe they could be useful to investors.

Out of the gate, the one that looks most interesting to me is a telecom fund called the WisdomTree International Communications Index Fund (DGG - commentary - Cramer's Take). The telecom sector is a good way to add foreign exposure to a portfolio because every country has a phone company (usually they are among the biggest), and they often pay a healthy dividend.

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Diversify portfolio across investments, asset classes

October 18, 2006
From The Journal Gazette:
In late spring of this year, investors were certain interest rates and energy prices were headed higher. We were worried about Iran and its nuclear ambitions, North Korea and its missile program, and the prospects, because of global warming, for another killer hurricane season.

North Korea has still been a concern. Iran is also still a problem, but appears to be on hold for now. And gasoline prices have fallen roughly 25 percent from a top north of $3 per gallon as oil prices dropped from the lack of any significant hurricane activity and record inventories. In addition, Chevron announced a major new oil and gas discovery in the Gulf of Mexico that may be bigger than the Alaskan oil fields. Clearly, in hindsight, the short-term news gave no significant investment direction to long-term investors.

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Micron Tech's diversification strategy hits speed bump

October 6, 2006
From MarketWatch:
A couple analysts downgraded Micron's shares after the company's latest quarterly results fell below Wall Street's consensus expectations.

Micron reported earnings of 8 cents a share on sales of $1.4 billion. Analysts polled by Thomson First Call expected earnings of 14 cents a share on revenue of $1.42 billion.

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Officials: Energy Diversification Needed

October 2, 2006
From Yahoo! Finance:
 Oil and gas will be central to the energy business into the foreseeable future, but tapping unconventional and alternative sources will be necessary to meet growing energy demands, industry officials said Monday.

"The easy oil is gone," Russ Ford, technical vice president for Shell Exploration & Production Co., a unit of Royal Dutch Shell PLC, told a gathering of geophysicists in New Orleans.

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Funds of funds offer maximum diversification and simplicity

October 1, 2006
From TimesLeader.com:
 If a mutual fund can be said to be like a general store in the variety it can offer, then a fund of funds would certainly resemble a warehouse retailer, allowing investors to pick up enormous variety all under one roof.

A fund of funds, which is simply a mutual fund that invests in other mutual funds, can leverage the expertise of many types of funds and fund managers, according to Tom Roseen, senior research analyst at Lipper.

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Hedge funds investment to diversify portfolio: Global

September 25, 2006
From Kuwait Times:
Global Investment House announced yesterday that hedge funds investment would help diversify an investor's portfolio, thus decreasing risk at a time when the local stock markets is experiencing a higher level of volatility than in recent years.

Sameer Al-Gharaballi, Global's Executive Vice-president for Investment Funds said, "When looking at the global market, Kuwait and the rest of the GCC represent less than 1 per cent of the world's market capitalisation."

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Diversify, exercise caution, keep expenses low

September 18, 2006
From Delaware Online:
 Wanted: Portfolio manager for life savings. Must produce steady stream of income for next 30 to 40 years without going broke. Requires knowledge of bonds, stocks and mutual funds. Ability to predict interest rates a plus.

You may not realize it now, but you're stepping into this job when you retire. You'll get a performance review each month, in the form of a check. When you do well, the check will be bigger. When you do badly, there might not be any check at all. 

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Too much diversification can hurt investment returns

September 15, 2006
From CANOE Money:
 Too much diversification in your portfolio can hurt investment returns.

It is advisable to diversify to some degree - splitting your portfolio into several asset classes such as equities, bonds, income trusts and other categories such as real estate to spread risk and reduce volatility. 

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World Bank suggests East Asia to further diversify financial market

September 15, 2006
From People's Daily Online:
 The World Bank on Thursday suggested East Asia to further diversify its financial markets by developing its security markets.

"The East Asia needs and is well positioned to enhance its financial systems to meet the growing and increasingly sophisticated demand for financial intermediation in the region," said Homi Kharas, the World Bank's Chief Economist for East Asia and the Pacific, at a press conference in Singapore Thursday.

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Diversify for stable return

September 6, 2006
From The Macon Telegraph:
 QUESTION: In your last column, you gave an example of earning 10 percent on retirement investments. Would you explain where or how to invest and earn 10 percent?

ANSWER: Financial markets run in cycles. During any cycle, some types of investments may earn higher rates of return than other types of investments. For example, it is not unusual for international investments to do well even when the U.S. market is sluggish. Some mutual funds may be earning 18 percent at the same time that others are earning only 4 percent or even experiencing losses.

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Diversify holdings before and after your retirement

September 1, 2006
From The Windsor Tribune:
 If you have been investing for even a little while, you have probably heard that it’s a good idea to diversify your holdings.

By spreading your investment dollars among a range of securities, you can help defend yourself against downturns that may largely affect one type of asset. For example, if you own only stocks, and the stock market is slumping, your portfolio may be vulnerable to sizable losses. But if you own stocks, bonds and other investments that are appropriate for your needs and risk tolerance, you may give yourself more opportunities for success.

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What Diversification Is, and Why It's Important

August 16, 2006
From DailyIndia.com:
 If you've been looking into options for investment, you might have heard several mentions about diversification and its importance to making good investments. Unfortunately, if you're not really sure what diversification is or how to go about it, you might end up missing out on one of the best tools that you can have for making sound investments that are better protected against the fluctuations of the stock market.

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RealMoney Radio: Celebrate Diversification

August 14, 2006
From TheStreet.com:
 "I believe in diversification because I accept the fallibility of my own judgment," Cramer said.

Diversification is not just the remedy for those who pick the wrong stock; it is the remedy for the company that goes the wrong direction, he said.

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Does Diversity Devalue Devon?

August 8, 2006
From The Motley Fool:
Diversification of assets is a great thing, until it isn't. Some companies, like Apache (NYSE: APA) and Occidental (NYSE: OXY), can do well managing a geographically diverse array of assets. With Devon Energy (NYSE: DVN), though, I'm not so sure that this diversification has been quite so helpful.

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GPF chief upbeat about economic and investment growth

August 7, 2006
From ETNA:
It had adopted the investment diversification with 72.07 per cent of total investment set aside for local debt instruments, 10.58 per cent for local capital instruments, 2.77 for foreign debt instruments through mutual funds, 5.79 per cent for foreign debt instruments, 0.84 per cent for foreign capital instruments, 2.96 per cent for property funds, and 4.99 per cent for other investment channels.

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Diversification's benefits shrinking

July 24, 2006
From The National Post:
If you've been caught up in the recent wild swings in the stock market, you might be taking another look at your equity portfolio right now: Is it properly diversified to avoid some of the bigger bumps looming ahead?

The problem is, the goal of diversification isn't as easy to achieve as it might sound. In today's globalized environment, where an increasing number of companies straddle the world, .

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Building wealth wisely through diversification

July 12, 2006
From BankRate.com:
 What's a better way of accumulating wealth? Buying individual stocks? Or buying diversified mutual funds run by professional money managers who do nothing else but examine the financials of publicly traded companies and whose livelihoods depend on performance?

The answer may seem obvious, particularly from the standpoint of someone who covered mutual funds for several years for a niche publication that focused on these investments. But recently, I got sidetracked by books written by financial experts who offered the glittering prospect of getting rich by buying individual stocks.

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All-Star Stocks: Splendid Diversification

July 11, 2006
From The Motley Fool:
In the spirit of today's All-Star Game, our own all-star analysts offer a glimpse at their best-performing stocks over the past few years.

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Some like timing on hybrid securities; diversification may work better

July 10, 2006
From MarketWatch:
 Quickly put aside the notion of driving off the dealer's lot in a sporty roofless ride -- Grenier's no car salesman. He's president of Cutler Capital Management LLC, a Worcester, Mass., investment-management firm that specializes in convertible securities and real estate investment trusts.

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China central banker urges reserve diversification

June 27, 2006
From China Daily:
A leading Chinese central bank official said that countries around the world should gradually rely less on the U.S. dollar for trade and their foreign exchange reserves.

The remark comes after the repeated suggestions by former U.S. Treasury secretary and president of Harvard University, Lawrence H. Summers, that the world's biggest holders of U.S. Treasury bonds ought to find better ways to invest their hard-earned money.

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Diversification still works

June 20, 2006
From The Los Angeles Times:
No question, William Richkus' portfolio is diversified.

His holdings: mutual funds with corporate and municipal bonds, inflation-protected Treasuries, real estate, international stocks and small-, medium- and large-cap equities in growth and value styles. Last month, when the U.S. stock market turned in its worst performance in years, Richkus noticed something across all asset classes: Down. Down. Down. Waaaay down.

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Fund of funds offers int'l diversification

June 15, 2006
From InvestmentNews.com:
Few advisers with $1 million to invest for a client would risk it all on a mutual fund that represents a single asset class, yet that essentially is what many do when it comes to the international portion of their customers' portfolios, according to one portfolio manager.

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Ray Unger: Need to sell? Check portfolio diversification

June 9, 2006
From The Capital Times:
Our new Federal Reserve chairman, Benjamin Bernanke, was recently dubbed "Recession Ben" by some pundits. And given his propensity for delivering economic news - unfortunately, he's actually understandable compared to the loquacious, but undecipherable Alan Greenspan - his words may actually precipitate an economic downturn.

At least that's what the stock market thinks. Nonetheless, there are many in the economic fraternity who view Bernanke's warnings as a potent medicine - hard to swallow, but necessary for good health.

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For "sin" companies, diversification may make sense, study finds

June 8, 2006
From Indiana University:
Diversification, long derided as a poor strategy for companies seeking to maximize shareholder return, can actually help firms preserve their assets -- at least those companies threatened by litigation or regulation, according to a new study of tobacco company diversification activity led by Professor Messod Daniel Beneish of Indiana University's Kelley School of Business.

Beneish and his three co-authors are the first to suggest that diversification makes good business sense for certain types of companies -- those facing serious legal and political costs. For those companies, parking capital elsewhere in physical assets can keep it away from litigators and help shore up "political capital" as well.

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It's Mr. Focus v. Mr. Diversification

June 3, 2006
From Globe & Mail:
If you still think Canada's big banks are an indistinguishable lot, lumbering along in more or less the same direction, consider a couple of remarks from the recent earnings season.

First up was Ed Clark, the chief executive officer of Toronto-Dominion Bank, who has been plowing money into U.S. acquisitions about as fast as he can find a bank willing to sell to him.

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Diversification by central banks to weigh on US dollar

June 1, 2006
From New Ratings:
Analysts at Merrill Lynch say that the diversification of reserves by central banks away from the dollar is likely to exert pressure on the US currency.

In a research note published this morning, the analysts mention that there have been recent announcements of several central banks diversifying reserves out of the US dollar.

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Heard Off the Street: Foreign investment doesn't equal diversification

May 28, 2006
From post-gazette.com:
Robust growth in some overseas markets has prompted many investors to consider spicing up their portfolios with a more international flavor. In their well-intentioned attempt to do the right thing by diversifying, some of them may be missing the mark.

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NTPC on diversification drive

May 26, 2006
From Money Control:
NTPC could be on a major restructuring and diversification drive. A report by the Ministry of Power and the Central Electricity Authority has recommended NTPC to get into power trading and distribution and even go nuclear, CNBC-TV18 reports.

NTPC is looking beyond power generation. CNBC-TV18 learns that a government report has recommended big diversification plans, including going nuclear.

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Diversification - It's Not Just A Word

May 15, 2006
From PR Web:
When the financial markets are extremely volatile traders can feel their stress levels rising. But there is no reason to be stressed if you are diversified. If a position turns into a losing one, but that position is only 10% of a well diversified timing portfolio, you will not feel the same as you would if it was your entire portfolio. Diversified portfolios are just as profitable, but you sleep better.

The current markets are quite volatile. Rallies lasting only days, followed immediately by sell-offs. Volatility is great if it is within a trend, but volatility that only moves the markets up and down quickly, within a sideways (trendless) trading range, can be quite unsettling.

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Diversification Zone

May 15, 2006
From Kommersant:
Global investors do not consider investing in Russia excessively risky, neither when compared to other developing countries nor even with developed regions. That is the conclusion reached by a recent poll of businessmen as part of research being carried out by the Emerging Markets Private Equity Association. The Central and Eastern Europe region, which includes Russia, is in firm second place among investors from among five regions – Asia, Latin America, the Middle East, Africa and Central and Eastern Europe.

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Investing: Don't hedge your bets after all

May 11, 2006
From CNN Money:
When it comes to investing, diversification is the closest thing to a free lunch. Simply by spreading money around unrelated investments - municipal bonds that zig when Wal-Mart (Research) and Microsoft (Research) shares zag - investors can reduce risk without reducing long-term returns. At least, that's always been the rule of thumb.

But what happens if the asset classes whose price movements are out of sync with the U.S. stock market suddenly stop marching to their own drummers? That, says Merrill Lynch (Research) strategist Kari Bayer Pinkernell, is the predicament in which investors find themselves today. 

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Managing Globalization: How diversification can act as a hedge

May 9, 2006
From International Herald Tribune:
When Evo Morales was elected president of Bolivia in December, he pledged to take over the country's natural gas industry - yet the stock prices of the foreign companies that extract the gas barely moved.

Two weeks ago, when he made good on his promise, investors still weren't spooked. With hundreds of millions of dollars worth of assets in play, the question is, why? It's not that investors don't care. Rather, multinational companies have found a variety of ways to protect themselves against political risks in the countries where they do business. 

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U.S. exchanges jump on diversification bandwagon

May 3, 2006
From Globe and Mail:
Under chief executive officer Meyer (Sandy) Frucher, the Philadelphia Stock Exchange has morphed from just another small, endangered regional stock market to a place at the table in a fast-changing global industry.

The PHLX, as it is known, has survived chiefly by diversifying from its traditional core business of trading stocks. It now handles equity options, index options, currency options and futures, evolving into a one-stop securities mart. 

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BSB plans diversification

May 2, 2006
From TradeArabia:
 Bahraini Saudi Bank (BSB), which made a net profit of BD2.3 million last year, is to diversify its operations, it has been revealed.

The board and the management have been able to achieve its main goal of restoring market confidence in the bank, said chief executive Khalid Shaheen.

BSB's total assets increased from BD128 million in 2004 to BD163 million last year, he said. 

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Investment diversification key to success

May 2, 2006
From MENAFN:
 Diversification of investment was named as the key factor to success in the region, but it will be some time before the region attracts a 'significant amount' of international capital, according to speakers on the second day of the Arabian Hotel Investment Conference in Dubai.

Muneef Tarmoom, CEO of Istithmar, said: "Rather than invest in one property, the best way to enter the regional market is to invest small in a diversified regional investment fund. This way, you will see direct feedback quickly and can decide whether to increase your commitment." 

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Diversification key for the average investor

May 1, 2006
From Stuff.co.nz:
From the school of modern portfolio theory, diversification is possibly the most important investment concept for the average investor.

The biggest mistake investors typically make is over exposing themselves to a particular asset class, skewing their asset allocation inappropriately.

For New Zealanders, the most common situation is investing a disproportionately large component of their investment assets in residential rental properties. 

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MFs offer more diversification now

April 30, 2006
From The Hindu Business Line:
If you thought that the asset management industry in India has already worked out a fairly wide range of equity products, prepare yourself for facts that may surprise you yet. The mutual fund market is not only growing in size - you have sensed that by now, haven't you? - but also in terms of variety.

Consider some of the funds that have been launched in recent times, and you will have an idea of the diversity that is at work right at this moment.

Yes, a good number of schemes remain me-too in nature, launched by fund houses that are jostling for space. And yet, many of the funds carrying fancy name-tags are simply diversified products that have latched on to specific themes.

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