A major argument against diversification is that it's more efficient for shareholders to hold diversified share portfolios, than to invest in diversified companies.

Question

Quizplus · Accepted Answer

Diversification can spread a company's resources too thin, potentially reducing focus and efficiency. Shareholders can diversify their own portfolios more effectively and according to their personal risk preferences, without relying on companies to do so.

A Major Argument Against Diversification Is That It's More Efficient