The Importance of Investment Diversification

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As a general rule, investment portfolios exist to serve some quantifiable purpose. For individual investors, funds are set aside for retirement, college, or other major life events. For institutional or corporate investors, an investment portfolio may be designed to fund a pension for a large group of beneficiaries (employees and retirees from a given company), to meet the operating needs of a university or charitable organization, to earn a profit for an insurance company or bank, or other business objectives.