Why your portfolio is less diversified than you might think
What is the best piece of investment advice you could fit into a single, short sentence? “Buy stocks” wins points for brevity and high returns. “Buy American stocks”, if given at almost any point over the past few decades, would have done even better. “Don’t waste money on stockpickers’ fees” deserves an honourable mention. Here is a less punchy suggestion: “A diversified portfolio can have the same returns as a concentrated one, with less risk.”
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This article appeared in the Finance & economics section of the print edition under the headline “Diversity problem”
From the February 1st 2025 edition
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