Today's Word of the Day:

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Definition: The practice or policy of spreading investments, resources, or activities across a variety of assets, sectors, or approaches to reduce exposure to any single risk.

Origin: From Latin diversus (“turned different, various”) + -fication (“the making or process of”), via French/Modern Latin formations; diversification entered English in the 19th century in the sense of “making diverse,” later popularized in business and finance.

Usage: To lower portfolio volatility, the advisor recommended diversification across domestic equities, international equities, and bonds.

and: The company pursued diversification by expanding from a single product line into logistics and after-sales services.

Quote: “Diversification is a protection against ignorance.” — Warren Buffett, 1996.

Misuse: “I diversified my portfolio by buying five different tech stocks,” which misuses the term because holding multiple stocks in the same sector may not provide meaningful diversification.