Diversified vs Buffett focused investment: Things to consider

Alice Arnault
2023-05-04

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We are often asked to diversify to reduce our risks, thats why at times there are some discussions on why does Mr Buffett Says to focus, i summarized some points for sharing 

Here are some points to consider when deciding whether to diversify or not:

Risk tolerance: If you have a low risk tolerance, diversification can help spread the risk across multiple investments, reducing the impact of underperformance in any single investment.

Time horizon: Diversification may be more suitable for those with a shorter investment time horizon, as the potential for market fluctuations could be more significant over shorter periods.

Investment knowledge: If you have a deep understanding of a specific industry or company, you might feel more confident in a focused investment strategy. On the other hand, if your expertise is limited, diversification can help manage the risk associated with lack of knowledge.

Market conditions: In uncertain or volatile markets, diversification may provide a level of protection against significant losses, as it is more challenging to predict individual stock performance.

Portfolio size: If you have a small portfolio, diversification might not provide the same level of risk reduction, as each investment would still represent a significant portion of your total investments.

its a bit like life diversify when seeking, focus more when the hunting has started 

What do you think?

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