Could diversification make you millions?
More than Money with Gene Dickison Answers:
“Could diversification make you millions?”
It depends . . . are you willing to be patient?
A properly diversified investment portfolio could possibly make you millions of dollars if among other things you are disciplined and patient, but . . . .
If your goal is to make the most money you possibly can with your investments – you don’t want to diversify!
Investors often misunderstand the reason for proper diversification - which is to reduce the effects of extreme volatility, smooth out the downs (and ups) of your investment experience, and produce more consistent returns.
Investors who wish to make maximum returns in minimum time must avoid diversity and instead look to concentrate all their resources (money, time, effort) in one asset. Then they must (continually) pray they picked the right asset.
Prayer is a necessary component of this investment strategy since concentration increases risk significantly (dramatically, frighteningly – pick your poison).
Not right for most folks. Right for you? It depends . . .
What kind of investor are you?
© 2015 More than Money and Gene Dickison
Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance is no guarantee of future results. Please note that individual situations can vary. Therefore, the information presented here should only be relied upon when coordinated with individual professional advice.