undiversified

Undiversified refers to a situation where an investment portfolio or a business's operations are concentrated in a very limited number of assets or activities. In the context of investing, an undiversified portfolio holds only a few different types of assets, or a significant portion of its value is tied up in a single asset or sector. This lack of diversification means that the performance of the entire portfolio is heavily reliant on the success or failure of these few concentrated holdings. If the chosen assets or sectors perform poorly, the overall investment will suffer a substantial loss.

Similarly, in business, an undiversified company relies heavily on a single product, service, or market. If demand for that particular offering declines, or if a competitor emerges with a superior alternative, the company's revenue and profitability can be severely impacted. This concentration makes the business vulnerable to external shocks and market fluctuations. The opposite of undiversified is diversified, where risks are spread across a wide range of assets or business activities, thereby reducing the impact of any single negative event.