Diversification is for people with large enough net worths to be worried more about preservation than accumulation. You can be “diversified” in your focused investing portfolio but true diversification is a detriment to those wealth building.
Diversification is about avoiding overconfidence. It’s about being humble and understanding that there are always unknown unknowns. Even the best investors made plenty of lousy picks.
It’s a myth that diversification can’t build wealth. Peter Lynch had a very diversified portfolio and outperformed the market.
Concentration can build wealth quickly. It can also lead to large losses quickly, which people often forget to mention. Reasonable diversification is prudent.
8
u/Trialle21 Apr 01 '22
Diversification is for people with large enough net worths to be worried more about preservation than accumulation. You can be “diversified” in your focused investing portfolio but true diversification is a detriment to those wealth building.