- Extreme diversification is good but only provides ordinary results results.
- Concentrated portfolios proved better in some cases as they allow investors to select the best companies.
A few days ago we discussed passive and active strategies given that there is a looming risk of a recession and that the markets are unable to break new highs which makes just holding stocks for the sake of holding stocks very risky. In this article we are going to discuss how diversified a portfolio should be as it is easier to pursue an active strategy with a concentrated portfolio of stocks. More →