FYI: As much as any topic in finance, cargo ships of ink have been spilled on the topic of diversification. It is unquestionably the anchor to designing an effective portfolio of investments. Though first formally articulated in Harry Markowitz’s seminal 1952 paper on Modern Portfolio Theory (MPT), the idea is commonsense to all of us: Don’t put all of your eggs in one basket.
Regartds,
Ted
http://brianportnoy.tumblr.com/post/113161168674/diversification-means-always-having-to-say-youreThe problem is that many investors take 'don't put all of you eggs in one basket' to mean having several baskets containing every asset know to man. They slice-and-dice believing they are reducing risk by the numbers of asset classes they own, and they confuse volatility with risk.
