Questioning the Traditional Diversification Theory

It is widely believed that diversification of portfolios is one of the most important concepts of modern finance. Based on the effective frontier theory, the performance of the long-term portfolio is largely independent of the quality of the individual investment, and by the asset allocation across a broad portfolio portfolio aimed at achieving a return above average through appropriate capital distribution It will be decided. Understanding past revenues and risks associated with various security categories makes it easier to make investments successful.

The following literature focuses on the theory of diversity and the basic scope of its business. In the literature review, we will explore the main dynamics of diversification and explore why some companies will contribute greatly to the development of diversification strategies. At the end of the review, evidence from several empirical studies was considered in the performance of selected diversified enterprises. There is no gap in the current knowledge of how family health management companies should participate in diversification strategies, their reasons, time, place, and degree of information.

Diversity is the center of the investment model of the donation model. Svensson applies the academic principles of modern portfolio theory to Yahoo's large-scale donation and claims that it is necessary to allocate less relevant asset classes to realize true diversification, and the volatility of the entire portfolio I will lower it. Through a strict long-term investment approach, the Yale Foundation Fund can promise the market and its strategy over the long term. In other words, you can possess less liquid assets than the open market. Assets classes such as private equity and venture capital require a commitment of at least 8 to 12 years. It will take 15 to 20 years to own forests and invest in large infrastructure projects. Liquidity is known as a non-liquid premium, and experts expect an annual revenue of 3% in the mobile (public) market.

Other investments such as private equity and venture capital tend to behave differently from stocks and bonds - and generally include the possibility of bringing more diversification of their portfolio -