what are the advantage of diversification of trade
Answers
Answer:
Advantages Of Diversification
The following are the advantages of diversification:
As the economy changes, the spending patterns of the people change. Diversification into a number of industries or product line can help create a balance for the entity during these ups and downs.
There will always be unpleasant surprises within a single investment. Being diversified can help in balancing such surprises.
Diversification helps to maximize the use of potentially underutilized resources.
Certain industries may fall down for a specific time frame owing to economic factors. Diversification provides movement away from activities which may be declining
Answer:
Three key advantages of diversification include: Minimising risk of loss – if one investment performs poorly over a certain period, other investments may perform better over that same period, reducing the potential losses of your investment portfolio from concentrating all your capital under one type of investment.