Diversification good or bad?
- Thread starter oraclewizard77
- Start date
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Good points;
even though 500 can do better than 100 sometimes.
So even if SPY[500] underperforms QQQ[100] mostly so seldom reduce returns much by diversification.
Strange how many times qld does better than TQQQ;
not all the the time\ so another case for diversification.......................................................................................
Andrew Carnegie was against diversification some what;
but did steel, railroads, oil derricks, bond saleman, big library gifts, cash from JPM, bridges, sleeping car co, Columbia Oil Co, pig iron,
3,000 libraries..............................................................................
Never put all your eggs in one basket is an old saying that has stood the test of time. A short but sharp shift in the market can completely unravel a portfolio that doesn’t spread itself across a number of markets. By diversifying, you are offsetting the chances of unpleasant losses.
False.
Your narrative is not correct.
I went all-in on a diversified portfolio of high-yield stocks in Feb 2020. The portfolio is up like 10% as of this typing. Why is that happening when most stocks are up +100% to +1000% since the March 2020 low?
You are a dinosaur. This is a different kind of market. Your old-school blah blah diversification nonsense is out-dated. I should know, I am living it.
What if the opposite has happened and it has gone down to 10%? Consider both the outcomes of the scenario. If you are really updated with all the new knowledge, you must know that financial markets is the name of the unexpected. Diversification is the best way to play defensive but I see being defensive really offends you. Congratulations on your gains. Enjoy and let me live my old- school theory. Peace out!
You will still have unpleasant losses. Just not in all asset classes. It also prevent you from experiencing above average gains for the same reason it offsets losses.
If you are only diversifying with an equity portfolio you are wasting your time. In a market downturn most equities will fall.
No free lunches in trading, no edge in either diversifying or not diversifying.
However there are large differences in how one should trade either method.
If you diversify, then trading should be slower (longer term holds), there'll be less surprises and lower volatility.
And vice versa if one decides to trade non diversified.
Non diversified, be prepared to sit at a trading desk with higher mental concentration levels and attempting to time trades.
However there are large differences in how one should trade either method.
If you diversify, then trading should be slower (longer term holds), there'll be less surprises and lower volatility.
And vice versa if one decides to trade non diversified.
Non diversified, be prepared to sit at a trading desk with higher mental concentration levels and attempting to time trades.
What is non diversified?
My entire liquid net worth is in equities. No bonds, I own my own home but that's not liquid or does it provide cash flow and what ever meagre pension the Canadian government decides to send me. I rarely hold more than 10 stocks at one time, closer to 6 to 8. My risk control is going to cash when stocks are not doing what I expect them to do.
I spend maybe a 1/2 hour per day monitoring my portfolio.
This...
a) I don't believe you.
b) No wonder you struggle
c) You are spending the bulk of your time elsewhere in trading, ie search for the holy grail.
'Portfolio' may include what you hold as well as what you wish to do with future position allocation, timing, selection, decisions on where to go.
I can't do anything about that.
I didn't even know I was struggling.
I have actually found it.