Diversification is for those who know at least 1 thing ... that they're not geniuses at that thing. :)
Speaking of which, think many didn't realise how concentrated the S&P is. At the peak on 3rd Jan, the top 5 stocks took up 25% of the weightage & tech in one form or another made up probably 1/3 of the index. ;)
Took a mere normalisation of interest rates for people to suddenly realise hoho.
Smol,
ReplyDeleteDiversification is for those who know at least 1 thing ... that they're not geniuses at that thing. :)
Speaking of which, think many didn't realise how concentrated the S&P is. At the peak on 3rd Jan, the top 5 stocks took up 25% of the weightage & tech in one form or another made up probably 1/3 of the index. ;)
Took a mere normalisation of interest rates for people to suddenly realise hoho.
Spur,
DeletePrecisely. How many bothered to take a look at the constituents and weightings?
The same goes for our STI.
It's merely 3 banks and 1 telco in essence.
That's what keeping STI "resilient" compared to S&P 500 for now.
Rising interest rates is good, better, best for banks.
Those who know, just overweight the financials directly ;)
I diversify as many stocks I could find and then let Mr Market shows me how to concentrate them. Mr Market knows better. LoL!
ReplyDeleteCW,
DeleteThat sounds quite like Peter Lynch's style ;)
Old fox you!