Diversification

[kennynah]

hahaha..... but i tend to agree with the above article...

[Musicwhiz]

Haha not really an astounding revelation - Warren Buffett had already said long ago that if you are "know-nothing" investor, then you should diversify.

[ghchua]

To be very frank, I would prefer to be labelled as a "know nothing" or lazy investor rather than having my portfolio being impacted by significant company specific events i.e. non-systemmatic risk.

I do agree that diversification will reduce return as compared to a well selected portfolio of good stocks, but the key is whether one really thinks that their selection of stocks is good enough to invest for long term.

For me personally, I choose the diversification route but I do overweight some stocks which I felt will do well in the long run. Therefore, mine is a slight modification from the pure diversification approach.

[kennynah]

tan lui can already lah... diversification, specialization, char kway teow, rojak, ipoh hor fun, all also can lah....

ai ler hua hi nia....

some people no 50% return on capital in a month, buay song... some people 10% annual return already happy like bird... so all depends on your happy...

[winston]

some people no 50% return on capital in a month, buay song... some people 10% annual return already happy like bird... so all depends on your happy...

I try to take profit whenever, I have a Sin$500 profit on a Swing trade. Yes, I feel very Buay Song if the profit is only Sin$500 on a Position Trade ... waste of my time and energy.

So nowadays, I just Swing Trade and you dont have to really worry about stuff like Systemic Risk, PIGS, Market Direction etc ..

[kennynah]

welcome to the club....i oso beginning to swing trade...well...in training now lah.... i agree..sometimes...wait one whole month play options...win kacang puteh money...worst still, lose $$.... swing trade...on a good day on just one futures contract... few hundred bucks man...if very lucky thousands oso can.... bian huan loh...simi systematic risk lah.... fair value lah.... next day gap up and down lah (i try to not hold o/n positions)... company CEO caught sunbathing naked with his mistress lah ...

all humpalang no care...

[winston]

TOL:-

Are you truly diversified, if you have allocations to Equities, Commodities and Properties ?

Did you not noticed that they all rise and drop at the same time ?

[Chinaman]

TOL:-

Are you truly diversified, if you have allocations to Equities, Commodities and Properties ?

Did you not noticed that they all rise and drop at the same time ?

To me the best diversification is ....CASH

[kennynah]

cash by itself is a deteriorating asset...

[winston]

cash by itself is a deteriorating asset...

Agree. If one is invested in Cash over the last few decades, it will be a depreciating Asset.

However, Cash is a place to park money for the short term while the market is in turmoil and if you are not comfortable using the Cash to short or to buy Inverse ETFs.

The gold bugs would say that gold is a better place to park money and they have been right over the past decade