Why true diversification means saying you’re sorry

I have borrowed this title from a superb blog post by Michael Kitces that was written for financial advisors. It is such an amazing statement that many do not want to hear it from an expert advisor.

Does this mean that a concentrated portfolio would be a winning strategy? Well, the answer is “it depends”. But, depends on what? You may ask.

It depends on who you are and what you know and whether you know. To understand this statement, please read this article I wrote in May 2007.  Read a section on “Portfolio concentration” in the book “Riding The Roller Coaster – Lessons from financial market cycles we repeatedly forget“.

There is a reason why you must have a concentrated portfolio and there is a reason why you need a diversified portfolio. Understand the difference before building your investment portfolio.

#RidingTheRollerCoaster – 195

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