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Diversification Is a Balancing Act

#Diversification is a balancing act between risk and return #ChartOfTheDay


  • Diversification is necessary to reduce risk, but too much diversification reduces chances of outperformance
  • Diversification is a balance between risk and return
  • A concentrated portfolio uses diversification to reduce risk but increases the chance of outperformance


Full paper available for free at SSRN.


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