ohh this place is full of "shitty traders who think they're smarter than everybody else" lol
Diversification good or bad?
- Thread starter oraclewizard77
- Start date
ohh this place is full of "shitty traders who think they're smarter than everybody else" lol
How about 3 or 4? Max 10 any more than that is too much. Just shows you don't have confidence in what you are doing.
Well, it's up to you. Your future, your life, your choices. You have your own desire for wealth, money, success.
If you are bold, hungry, ambitious...put all your eggs in one basket, more or less, and do and excel at that one thing.
If you are, naturally, more conservative...less bold and hungry....then plan your future, boringly, accordingly to that ideology perspective.
There is no right or wrong answer...each road has its own, unique, set of risks and rewards.
All futures are priced accordingly. Debating trading/investing choices...would be like debating about a Citizen watch versus a Rolex. A Toyota Camry versus a Porsche. Which one is better, well...that depends.
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It's worth debating the various options because it helps one understand and refine their own viewpoint.
Personally, I'm not trying to beat the s&p500. I want less risk than that.
I don't like a pe ratio of 35.
https://www.multpl.com/s-p-500-pe-ratio
I'm sure someone will say "what risk”, but if that's the case why not go for a 2x levered s&p500? I would think that is more comparable in risk to putting all you eggs in one or two baskets.
Personally, I'm not trying to beat the s&p500. I want less risk than that.
I don't like a pe ratio of 35.
https://www.multpl.com/s-p-500-pe-ratio
I'm sure someone will say "what risk”, but if that's the case why not go for a 2x levered s&p500? I would think that is more comparable in risk to putting all you eggs in one or two baskets.
How about thinking this way....
Imagine a stock exchange with 2000 listings, so you decide to choose the top 10% according to your criteria to trade, that's 200 stocks.
This method gets you to choose 200 performers, keeps you interested, of that 200, possibly 10% (20) will outperform and give outstanding gains, and 10% will underperform.
Those outperformers will gain way more than those underperformers which loose.
Personally, I prefer diversifying with small positions similar to the above.
I used to think about it that way. Then I asked myself why I was trading/investing. The answer seemed simple enough, to make money, to increase my wealth and to be able to fund my lifestyle.
It turned out that by having a well diversified portfolio I was underperforming the index ETFs. I had to find a way to outperform or just buy the index. I managed to do this with an actively managed portfolio of momentum/growth stocks. The end result is that over time I manage to make more money with my strategy than I would have if I invested in SPY.
If you are handily outperforming your index then keep doing what you are doing. If not you might want to reconsider what you are doing and why you are doing it.
If investing is a hobby and you don't care about making money, if owning one or two big gainers so you can impress your friends is important and if you want excitement or need to keep busy then buy all the stocks you need. If you are not outperforming the index then buy the index or change what you are doing.
More like individuals don't get the survivorship advantage that indexes have.
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Exactly.
MARKETs change to much not to diversify. EVEN Bill Gates changed/exchanged some of his billions of MSFT for cash............................................................................
