Börsenlexikon: Diversification

Diversification is the spreading of investment capital across different investments in order to reduce risk. Losses should be minimised in this way. With a sensible diversification, a high loss in value of an individual investment has only a relatively small effect on the overall success. For value investors, this is an indispensable component of a responsible investment strategy.

Diversification within the WI OUTPERFORMANCE PORTFOLIOS is an indispensable component of value investing. We classify stocks into four risk categories, R1 to R4, with a greater weighting to less risky stocks and an underweighting to very risky stocks. The weighting caps per share are:

Risk category R1 = 10% of assets
Risk category R2 = 7.5% of assets
Risk category R3 = 5% of assets
Risk category R4 = 2.5% of assets