STREET DOGS

Diversification is an established tenet of conservative investment — Benjamin Graham.

Don’t overstress diversification … buying a company without having sufficient knowledge of it may be even more dangerous than having inadequate diversification … investors have been so oversold on diversification that fear of having too many eggs in one basket has caused them to put far too little into companies they thoroughly know and far too much in others which they know nothing about — Philip Fisher.

Do you like a particular stock? Put 10% or so of your portfolio on it. Good investment ideas should not be diversified away into meaningless oblivion — Bill Gross.

Many financial advisers recommend you diversify for your own protection. What they fail to tell you is that it is also for their protection. Since most advisers cannot tell you exactly which stock or mutual fund is a great investment, they tell you to buy a bunch of them — Robert Kiyosaki.

Diversify. In stocks and bonds, as in much else, there is safety in numbers. In my 45-year career as an investment counsellor humility has shown me the need for worldwide diversification to reduce risk. That career did help me to become more and more humble because statistics showed that when I advised a client to buy one stock to replace another, about one-third of the time the client would have done better to ignore my advice. In other endeavours, humility about how little I know has encouraged me to listen more carefully and more wisely — John Templeton.

Here is part of the trade-off with diversification. You must be diversified enough to survive bad times or bad luck so that skill and good process can have the chance to pay off over the long term — Joel Greenblatt.