FYI: After I pulled one old column out of my archives, I found another piece — from an old “mailbag” feature in which I answered questions from readers — in which I had said essentially the same thing in a more frivolous tone. I post it now mainly as a reminder that whenever people start questioning the value of diversification — as countless investors did in late 1998, 1999, and early 2000 — overconcentration and overconfidence must be on the rise, and the risk of being underdiversified is likely to materialize. I don’t think we’re there yet in 2018, but you should always be vigilant against the risk of believing that risks have been repealed. Look carefully at the letter the reader sent me. If you ever hear anyone else — or yourself! — sound like that, it’s time to broaden your portfolio
Regards,
Ted
http://jasonzweig.com/in-defense-of-diversification/
Comments
I am reminded of a quote I saw years ago that went something like this: The conventional wisdom is that the only way to make money in stocks is to buy and hold - and the only way to make money in gold is through short term trades. But there will come a time when that theory reverses and people will say gold should be bought and held while stocks are in a range that calls for short term trades.
Substitute US stocks for stocks and Foreign stocks for gold and you have today’s environment.