Diversification good or bad?

[murray t turtle]

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.

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Sounds about right;
average of yours =7/ETFs.[IF i kept getting margin calls like one poster noted recently\ i would KNOW\ too much leverage\borrowing + not enough study + diversification................................................................................................]

 

[yana hansen]

Putting all my money is one asset with ruin my peace of mind. It gets worse especially if you have anxiety. So I will not go for a concentrated portfolio.

 

[Raheel Shaikh]

Never put all your eggs in one basket
Diversification is one of the most important things towards financial freedom.

 

[deaddog]

Never put all your eggs in one basket
Diversification is one of the most important things towards financial freedom.

I agree if you are talking asset classes; Equities, commodities, fixed income, real estate, etc.

If you are referring to stocks, the majority of them fall in a bear market. A well diversified stock portfolio is still going to tank in a bear market.

 

[Raheel Shaikh]

I agree if you are talking asset classes; Equities, commodities, fixed income, real estate, etc.

If you are referring to stocks, the majority of them fall in a bear market. A well diversified stock portfolio is still going to tank in a bear market.

Well yes that's risk you take
if you look at long term holding you get paid out by dividends as well as % growth in stocks
and a bear market or a crash can make your portfolio bleed.

 

[deaddog]

Well yes that's risk you take
if you look at long term holding you get paid out by dividends as well as % growth in stocks
and a bear market or a crash can make your portfolio bleed.

So doesn't it stand to reason that to control that risk you have a method of being out of the market when it falls?

 

[noframe]

Never put all your eggs in one basket
Diversification is one of the most important things towards financial freedom.

Strongly agree with this famous quote. Diversification really helps in minimizing risk of the capital loss.

 

[koczeau]

It’s always effective to spread your capital so that you are not reliant upon a single trade for all your returns, but there’s another important truth about diversification, that whenever you are mitigating your risk you are also reducing the potential returns.

 

[jocrape]

Diversification helps to reduce the amount of risk you’re exposed to while trying to maximise your returns, but I also think that diversification can be cumbersome. This is because it is not easy to manage a diverse portfolio with multiple holdings.

 

[alexeykosenko]

Diversification is a useful way to mitigate the risk of huge losses and increasing the chances of survival in the market. To get maximum benefit out of your diversified portfolio, you should actively monitor and track price movements. It can better be done if you have a small portfolio with 4-5 instruments only.