don’t get me wrong, i understand diversification is important and that’s why things like roboadvisor has been sweeping the industry. but i feel like many contents are decades old and have serious doubt about the real life value.
I believe they are trying to hammer home the idea that it’s really difficult to beat the market, so difficult in fact that you’re better off optimizing your diversification and reaping the risk-return benefits of that. What content do you not see having real life value?
i was exaggerating but probably in the sense that most firms have their own ways of doing things and don’t care what the institution says.
Concentrated exposures, especially during crises often leads to investment withdrawal from the market, making the unrealized losses permanent losses in wealth. Diversification affords relatively higher capital protection with sustainable growth.