The advantage of diversification is that when markets and sectors do change leadership, as they always do, your portfolio will be positioned to take advantage of it, instead of attempting to chase it from the rear. The financial industry, always quick to recognize a marketing opportunity, plays on our pursuit of freedom and fleeting moments of greed by providing us with the necessary tools to do our own thing. Somehow, the importance of diversification gets lost along the way. We are told to go for the gusto, search out that next billion dollar stock. Diversification and common sense is out.
Instant riches is in.
It sounds good as a television advertisement. In real life, it is the discipline of diversification that that counts.