Non-diversified

Non-diversified describes a situation, entity, or investment strategy that concentrates resources, assets, or activities in a limited number of areas or holdings. This contrasts with a diversified approach, which spreads risk and opportunity across a wider range of options. In the context of finance, a non-diversified portfolio might invest heavily in a single stock or a particular industry, exposing it to greater volatility compared to a diversified one. Beyond finance, it can refer to a company's operations, a curriculum's focus, or even a person's social circle, all exhibiting a narrow scope or focus. This lack of breadth can lead to greater vulnerability to negative changes within the concentrated area.

Non-diversified meaning with examples

• The investor, believing strongly in tech stocks, maintained a non-diversified portfolio almost entirely composed of shares in a single tech company. Any downturn in the tech sector would severely impact their returns, highlighting the risks associated with such concentrated investments and their extreme volatility. A change in any single item would dramatically impact portfolio health.
• A small, non-diversified manufacturing company relied heavily on a single customer for the majority of its revenue. When that customer shifted its business to a competitor, the manufacturer faced significant financial hardship and was nearly forced to close because of a lack of resilience in its financial planning. The risk was uncompensated.
• The university's non-diversified curriculum, focusing almost exclusively on classical literature, offered students a limited range of perspectives and skill sets. Students lacked an understanding of modern technologies and current, critical areas of study. Consequently, graduates were less prepared for a rapidly changing and inclusive job market with a limited skillset.
• A business's non-diversified marketing strategy, relying heavily on a single social media platform, failed to reach a wider audience. When the platform's algorithm changed, the business's reach and engagement plummeted dramatically, proving the failure of relying on a single point of contact to its customers and leads.
• Their non-diversified friendship group, consisting solely of colleagues from their previous workplace, led to feelings of isolation after they changed jobs. They lacked alternative social support networks and different opinions to give the balance they now needed after separation from old support.