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Diversification: What Is It Good For?

Diversification: What Is It Good For?

The investing world can be a complicated place. There are two main approaches to portfolio management when it comes to concentration. The first approach is broad diversification, favoured by value investors such as Benjamin Graham (Graham’s advice of having a well-diversified portfolio of 30 or more deep value stocks) and more recently Noble Prize winning economist Harry Markowitz in his Modern Portfolio Theory, and Dr John Lintner, both of whom strongly advocated diversification. On the other hand, there’s the highly concentrated…

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