Diversification in investment works to avoid risks by establishing private investments in the country through various financial institutions
These is two posts of my classmates. Reply with 70 words for each
first one:
Diversification in investment works to avoid risks by establishing private investments in the country through various financial institutions in various industries. In addition to the necessity to establish effective economic growth. In the Kingdom of Saudi Arabia, the kingdom\’s main economy is reliance on natural resources from oil only. As a result, the country was in danger of becoming unstable because of its economy. The possibility of a decrease in the price of oil in the market. Therefore, there must be multiple areas of the economy.
Saudi Arabia can benefit from this by adopting Vision 2030 which is to increase non-oil exports in non-oil GDP from 16% to 50%. If this happens, then the Kingdom of Saudi Arabia will have established an economy in various fields and is not limited to one thing only, which is the export of oil. The state enjoys a remarkable industrial boom, a distinguished service sector, and a prosperous agricultural sector, and all of this can be relied upon in the state\’s financial budget.
REFERENCES:
Ramady, M. A. (2010). The Saudi Arabian economy: Policies, achievements, and challenges. Springer Science & Business Media.
second one
In the economic literatures, it is expected that the more economically complex a country, the more likely that it will have a low level of volatility in its GDP. This is not so far from the idea of diversification in financial theory (Portfolio theory), in which unsystematic risk is reduced or eliminated by diversification of assets within the portfolio. This will end up reducing the overall volatility of the portfolio.
Having a diverse economy has long been thought to play a key role in sustainable economies, and accordingly has enhanced the nation’s standard of living by creating wealth and jobs, encouraging the development of new knowledge and technology, and helping to ensure a stable political climate. For these reasons, a diverse economy is the goal of every nation in the world.
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