All in one stock or diversify risk?
According to this graph,
Only 4% of investors would all in one stock.
2% of them are talents and would make huge profits from one stock.
Just like we have seen a lot of stories of reaping millions of profits from $NVIDIA Corp(NVDA)$ .
Instead of “Magnificent 7”, some called Nvidia as “Magnificent 1”. Nvidia has been hitting new highs, just one step from $900.
Some even said Buffet has 50% of Berkshires portfolio in $Apple(AAPL)$ . He bought most of it in 2016, and it is up 600%.
But another 2% of them may lose all their funds on some doomed stocks like $AMC Entertainment(AMC)$ .
An investor earned 100,000 in the short squeeze of AMC and lost all of the profits a month later. And there are more pathetic stories.
96% of investors choose to diversify their portfolio.
The most important reason is that retail investors don’t understand the market nor the companies. So they diversify the money to prevent risks.
There are quotes like:
"Diversification is protection against ignorance"
"Diversification is for the amateur, not the professional investor."
Would you all in one stock like the “Magnificent 1”?
Or would you diversify risk?
Leave your comments and also post to win tiger coins~
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I would diversify. minimise risks, able to sleep soundly and don't have to be stressed over one stock...
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Would you all in one stock like the “Magnificent 1”?
Or would you diversify risk?
Leave your comments and also post to win tiger coins~
Even though we are 100% sure that the company is doing well, but we never know if there will be any unexpected black swam issue that might simply cause the stock to plunge suddenly. So, by diversify your portfolio, you distribute the potential risk and it is more sustainable to invest this way in long run.
Diversification is a risk management strategy that creates a mix of various investments within a portfolio. A diversified portfolio contains a mix of distinct asset types and investment vehicles in an attempt to limit exposure to any single asset or risk.
Or would I diversify risk? It all depends on how much money I have for the investment. The 96% of investors that choose to diversify their portfolio are very wise. The professional fund managers might ask their clients to invest all with them, saying "Diversification is for the amateur, not the professional investor.” However, Warren Buffett said, “Diversification is definitely protection against ignorance. “
And we know high risk can generate high return, only if you pick the right one.
So, can you pick the right one every time? [Chuckle]
PCT = Pandas Coffee Talk.
You can call me the stupid 2%. Me called it school fees repaid. My self-faults finding. It happen strangely at a time when TSLA data centre have power blackout of entire city. Abusive AI Trading or legal tradings because BI tradings are stupid. Me is willing to live with BI is so stupid we will never beat AI. So me stupid BI called it quit. Me cash out Tiger still earn 80.00SGD working capitals 2500.00SGD & buy 22Textbooks in Amazon. Me now only play Girl Portfolio 1.00USD Fractional. NVDA CEO: in about 5Years AI will take over all BI functions. Yes including shares imvestings & tradings. We will soon be officially known as dogs lower lifeform. Me is known as a dog 5Years earlier. Good lucks non-dogs humans.
New IPO eg. On pharmaceutical drugs, EVs, Govt. Bond… all shares are like waves and sudden waves can be high and lows but important dyhw.
Portfolio diversification is a strategic approach to investing where assets are spread across various sectors, classes, and geographies to mitigate risk. It's akin to not putting all your eggs in one basket, ensuring that a loss in one area doesn't spell disaster for the entire portfolio. Diversification can protect and stabilize returns over time. 📊
最重要的原因是散户投资者不了解市场，也不了解公司。所以他们分散资金以防范风险。
Me, im this type [笑哭]
If you know very very well about the business and predict its future with precision, you may put a significant portion of your wealth in an individual stock.
Otherwise, you must diversify because "Diversification is protection against ignorance."