Lesson 37 Concentrated Stock

Concentrating investments into one single company, just a few stocks, a sector such as tech stocks or financials, or a single country exposes the investor to enormous risk that is not going to be compensated. All these risks must be diversified away. The higher the concentration in a portfolio, the higher the risk that something awful might happen. Don’t do it. Diversification is the ultimate investor protection. Use it to prosper and sleep well at night.

Don’t Put All Your Eggs in One Basket

Everyone has heard this cliché, but it couldn’t be more true in the world of investments. Many clients’ entire nest eggs get decimated because the broker gambles on the future of a particular stock or sector of stocks ...

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