Diversification
The reduction in volatilityThe possibility that something will deviate from its expected or average value, including both good and bad results. More created by combining two or more processes (such as the prices of financial instruments) that do not have 100% correlationA number between -100% and +100% that represents the extent to which two processes or variables move in the same direction at the same time. More.
I am also a retired property-casualty actuaryA professional who assesses and manages the risks of financial investments, insurance policies and other potentially risky ventures. Source: www.investopedia.com/terms/a/actuary.asp More (someone who works with the math and statistics related to insurance). I spent a significant portion of my career building statistical models of all of the financial risks of an insurance company and interpreting their findings to help senior management make better financial decisions. I retired in my late 50’s, which one of my daughter’s friends thought clearly qualified me to write this blog. Read more about Susie Q