The glossary

Diversification

Diversification is the investment strategy of spreading capital across different assets, sectors, regions, and asset classes to reduce the impact of any single one underperforming. The opposite is concentration. Nobel laureate Harry Markowitz called diversification “the only free lunch in finance” because it can reduce portfolio risk without reducing expected return — provided the assets behave differently from each other. Most modern wealth management mandates, including Alpian’s investment portfolios, are built on diversification across global equities, bonds, and alternative assets, calibrated to each client’s risk profile.

Last verified: May 2026