Last month Mark Cuban said that “diversification is for idiots” and that buy and hold is a crock of shit.” Strong words from a top investor– but do you agree?
Vanguard founder Jack Bogle certainly doesn’t. He maintains that diversification guarantees returns while hedging the market, and that’s what the average investor (not Mark Cuban) needs.
“For the average investor that doesn’t want to spend his life consumed with investing–and should not spend his life consumed with investing–he should get a nice simple strategy of diversification, not only by asset class–that is to say, stocks and bonds largely–but by the number of stocks and bonds in each class, a thousand even. And what do you get for that? You get a guarantee that you’ll get your fair share of the market returns that the bond and stock market are generous enough to give to us.”
But then again, what if you want to make big money? That means you have to make big bets, “concentrated” bets, as Business Insider editor Henry Blodget says.
So where do you stand on what’s more important– concentration or diversification? We can’t all be Mark Cuban after all. But then again, we can’t all be Jack Bogle either.
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