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the rationale behind diversification is that the positive performance of some of your investments will offset the potential negative performance of other investments. For example, you can reduce economic risk and offset the risk of negative performance in domestic shares by investing also in international shares.Similarly, you can reduce exchange rate risk by spreading your overseas investments among different countries. You can also reduce institutional risk by spreading your investments across different asset classes, companies and fund managers. These techniques will limit the impact on your portfolio of an unfavorable movement in any one country, any particular currency or any particular asset class or investment.The reason behind the investment explosion is that the performance of some of your investment will compensate the performance negatively, that may arise from other investments. For example, you can reduce the risk and economic risk compensation performance negatively in domestic stocks by investing in foreign stocks. Similarly, you can reduce the risk of exchange rate by investing in overseas distribution in different countries. In addition, you can also reduce the risk of an explosion by the institution investing in different assets. The company and the Manager of the Fund, these techniques will limit the impact on your portfolio of motion without permitting any member country in any currency, especially a specific asset class or investment?Diversification' is an investment technique that mixes different kinds of investments in a portfolio. The rationale behind diversification is that the positive performance of some of your investments will offset the potential negative performance of other investments. For example, you can reduce economic risk and offset the risk of negative performance in domestic shares by investing also in international shares.Similarly, you can reduce exchange rate risk by spreading your overseas investments among different countries. You can also reduce institutional risk by spreading your investments across different asset classes, companies and fund managers. These techniques will limit the impact on your portfolio of an unfavorable movement in any one country, any particular currency or any particular asset class or investment.
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