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Tag: Diversification

How to Invest the Lazy Way and Beat the Average Investor

How to Invest the Lazy Way and Beat the Average Investor

As I covered in my post on diversification last week, data shows that the chance of finding a long-term winning stock is only around 7%. With this being the case, it makes sense for most investors to hold a selection of tracker funds in their portfolios, rather than trying to beat the market by picking stocks. As the odds are heavily stacked against you, what’s the point of putting in the extra time and effort to find winning equities? Warren…

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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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