The Diverse Definitions of Diversification

"Diversification remains one of the most fundamental investing principles, and it’s often one of the most misunderstood," says Carl Richards, a writer for The New York Times whose primary focus is the stock market. Investors typically view stocks as individual entities instead of groupings or as a collective whole. We often neglect how individual stocks work in correlation with one another for the benefit of the whole and instead focus on which individual stock potentially offers the greatest return in the shortest duration of time. This approach to investing is short-sighted. Putting all of your eggs in one basket is a considerable risk, but spreading around your money allows one to reduce certain risks that come with placing your money in the stock market.

A diverse portfolio is one that is spread out in a variety of markets and not concentrated on a particular company or industry. This makes it less likely that you will be fully impacted if an entire industry were to crash; just ask those who put all of their investments behind the dot-com explosion in 2001. The same is true with purchasing individual stocks. Yes, placing a large sum of your investments in an individual stock can lead to a large return, especially if you pick the next Apple or Microsoft. However, the odds are highly improbable and if the company collapses, so does your portfolio.

The volatility of the market over the past 10 years has led many to believe that diversification is irrelevant. The current standing of the global economy is less than stellar, meaning all stocks are subject to another recession. So yes, one can say that diversification is irrelevant if the entire market crashes. But rather than saying diversification is irrelevant, for those who would like to remain secure, maybe the definition of the term simply needs to be altered. Dividing your investments between stocks and bonds is a safe way to potentially acquire a return on your investment while reducing the level of risk. The New York Times examined two portfolios over the past 30 years. One solely invested in the S&P 500 (domestic stocks) and the other diversified with 60 percent invested in stocks and 40 percent in bonds. Although the non-diversified stock had a 1 percent higher return rate, it also experienced 7 more quarters of negative growth. So yes, with another recession potentially looming, the old definition of diversification may not save you from a precipitous crash, but spreading your wealth between risky stocks and safe bonds may save you some money as well as frustration.

This guest blog was written by PRowl Public Relations staff member Evan Galusha.

The Fashion Industry and its Glaring PR issue

It is no secret that from the outside looking in, the fashion industry has a major PR problem: most of its waiflike beauties have light complexions. This is to say, the fashion industry hires people that look like the majority of those who work in the industry.

However, recent news has revealed an increase in models of color in headlining shows during New York Fashion Week. According to the New York Times blog "On the Runway" Keli Goff, a fashion industry watchdog and blogger, found that 90 percent of the 200-plus designers featured in Fashion Week had at least one black model, a seven percent jump from last year.

Though this is good news for the industry’s PR reputation, the industry still has to fix the problem at hand. So, what can they do to address it? The simple solution is to hire more models of color and feature them in advertisements. Another, more loftier suggestion, is for fashion houses to host events that celebrate women of color in the fashion industry. This would show that fashion houses are trying to change and are making the effort to diversify the industry more than ever before. In the future, professionals in the fashion industry can also come together to have a panel event where fashion experts discuss industry race issues and come up with ways to ultimately evolve the industry for the better.

Do you have any creative suggestions for the fashion industry to diversify itself? Let us know!

This guest blog was written by PRowl Public Relations staff member Kurie Fitzgerald.