Tuesday, 8 November 2022

Diversification is for the Know Nothing Investor



  1. Smol,

    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.

    1. Spur,

      Precisely. 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 ;)

  2. I diversify as many stocks I could find and then let Mr Market shows me how to concentrate them. Mr Market knows better. LoL!

    1. CW,

      That sounds quite like Peter Lynch's style ;)

      Old fox you!


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