diversification

What is diversification?


Diversification involves the planned distribution of investments across various securities to minimize the risk exposure to a specific industry or geographic segment. However, the risk of over-diversification exists, in which an investor can at best expect to mirror the market returns, minus any brokerage fees or management expenses.

A key rule of our three-part Successful Investor strategy is to spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; Consumer; Finance; and Utilities).

This has two main benefits: a) It keeps you from investing too heavily in any industry or sector that is headed into a period of big losses; and b) By spreading your investments out more widely, it also improves your chances of latching onto a market superstar—a stock that will wind up producing two or five or 10 times more profit than average.

ISHARES S&P/TSX GLOBAL BASE METALS ETF $16.86 (Toronto symbol XBM; TSINetwork ETF Rating: Aggressive; Market cap: $230.9 million) tracks the S&P/TSX Global Base Metals Index....
Molson Coors offers a solid yield at a cheap valuation but the low-price reflects skepticism about growth even as it diversifies away from beer.
Understand how to pick an ETF the best way and you will stay away from overpriced choices while targeting the market’s best. Learn more now.
ATS CORP., $37.35, is a buy. The company (Toronto symbol ATS; TSINetwork Rating: Average) (www.atsautomation.com; Shares outstanding: 97.9 million; Market cap: $3.7 billion; No dividends paid) on August 7, 2024, agreed to acquire all material assets from Heidolph Instruments GmbH & Co....
Here’s a recent question, and answer, from an Inner Circle member; it’s one that we feel bears repeating. The question, and answer, also addresses key issues about successful investing today—or in any market:

Q: Within the five economic sectors you advise for investing, should we also spread out our funds over some percentage of value, growth and small stocks?

A: If you take account of your own financial and personal circumstances and temperament, and if you invest as we advise (diversifying across most if not all of the five main economic sectors, while confining your investments mainly to well-established companies), you will almost automatically buy some growth stocks and some value stocks; you will also near automatically buy some small-company stocks and some big-company stocks.

However, the economic-sector diversification and overall investment quality of your portfolio are far more important than the relative amounts you invest in value, growth and small stocks.

In any event, it’s impossible to come up with a one-size-fits-all answer when talking about the best balance among value stocks, more aggressive small stocks and growth stocks (some of which can fall into more than one category)....
A: If you take account of your own financial and personal circumstances and temperament, and if you invest as we advise (diversifying across most if not all of the five main economic sectors, while confining your investments mainly to well-established companies), you will automatically buy some growth stocks and some value stocks; you will also automatically buy some small-company stocks and some big-company stocks....
INTACT FINANCIAL CORP., $288.21, is a buy. The stock (symbol IFC on Toronto) offers investors exposure to Canada’s largest provider of property and casualty insurance. Intact insures more than five million individuals and businesses. Its major brands are Intact Insurance, Canada BrokerLink and belairdirect.

In a bid to add value for investors, the company acquired OneBeacon Insurance Group for $1.7 billion U.S....
Capstone Copper is supported by a positive long-term outlook for the red metal as it forecasts significant production increases from high capex spending.
Most top global markets have rebounded since their big drop at the outbreak of the pandemic. Going forward, we think the outlook remains positive for quality stocks. One way to profit from that—while cutting your risk—is to invest in top ETFs.


Here’s a look at four international funds that we believe are well suited to new buying....
Discover why investing in US Stocks helps Canadian investors diversify, minimize risks, and seize global growth opportunities in North America.