Diversification good or bad?

[icegeek]

i believe in diversification.

 

[matthewyoung]

It's a phrase used by advisors to churn accounts. And make others appear like they know what they're talking about. Many BRK investors own 1 stock, and became wealthy. Warren has something to say about the topic.

It's a phrase used by advisors to churn accounts. And make others appear like they know what they're talking about. Many BRK investors own 1 stock, and became wealthy. Warren has something to say about the topic.

Brk investors receive a moderate return. The day of significant market beating is past for berkshire, the firm is way too big.

 

[viruscore1]

Brk investors receive a moderate return. The day of significant market beating is past for berkshire, the firm is way too big.

I use short options to trade brk.b

 

[sfwind]

The trick is to strike a balance. Easy said than done. At least 15 to 20 positions in order to manage risk effectively. Then how to weight each position is another art.

 

[viruscore1]

It depends, pic the right stock and you're good to go. But usually advisors use it to churn your account because they're poor stock pickers. Plus they're paid by commision. I can name a dozen+ stocks you're better off buying any one of them and hold. Then use options ...

 

[tomorton]

Diversification in the forex field fails when risk tolerance falls (or rises) significantly across the wider financial sector. Look at the Brexit effect for the last 2 months or so. Why would the UK leaving the EU have an impact on USD/JPY, or AUD/CAD? But yet it has.

 

[sfwind]

I currently have one really good stock idea but most of my portfolio is diversified.

I was wondering if I should sell down most of my other other stocks to concentrate on this idea if it works out could be a 300% return or play it safe and stay will a small % of my portfolio.

Cramer keeps harping about diversification but if the market goes down, I don't see how that really helps since all stocks go down.

Go for it, but be certain you can afford to lose it all.

 

[helpme_please]

In a portfolio of stocks, how many stocks is considered over-diversification?

 

[murray t turtle]

I currently have one really good stock idea but most of my portfolio is diversified.

I was wondering if I should sell down most of my other other stocks to concentrate on this idea if it works out could be a 300% return or play it safe and stay will a small % of my portfolio.

Cramer keeps harping about diversification but if the market goes down, I don't see how that really helps since all stocks go down.

%%
[1]Single stock is too much risk; ask GM, DAL+ Bear Stearns hit the dirt in a bear market.Plus more traders market risk since your JAN, 2009 post; investments that pay dividends may do well. NOT a prediction, not much of a DOW watcher.,

 

[rubbl]

In a portfolio of stocks, how many stocks is considered over-diversification?

There isn't a number, market risk will always exist for every stock,so i think a proper cash/equity balance is more important. Diversify to the extent that localized sector or company disasters won't tank you.