noun

diversification

dye-vur-sih-fih-KAY-shun/daɪˌvɜːrsɪfɪˈkeɪʃn/

The process of adding variety to reduce dependence or risk.

The farm's diversification adds carrots and beans alongside wheat, reducing reliance on one crop.

A farmer adds vegetable crops to a formerly single-crop field: one narrow strip of wheat remains, while adjacent small plots now grow carrots and beans, and three corresponding harvest baskets sit at edge.

Etymology

diLatinaside, apart

+versLatinto turn

+ificationEnglishprocess of making

Turning in different directions became the idea of making something varied. In the economic sense, this means spreading production or investments across several activities rather than depending on just one.

In context

The Financial Archives2:10

The main goal of a mutual fund is diversification, which helps reduce risk. If one investment in the fund performs poorly, the others may help balance it out.

Every Type of Investment Explained for Beginners

More examples

Crop diversification protects farmers when one crop fails.
The town encourages economic diversification to reduce its dependence on tourism.
Adding repair services is part of the store's diversification plan.

Forms

diversification

diversify verb — To add variety to reduce dependence or risk.

Similar words

broadening: Increases range without necessarily aiming to reduce risk.
spreading: Emphasizes distributing investments or risks rather than adding different kinds.