How To REALLY Find If You are REALLY Diversified....
So it is one of those "golden rules" to investing smart - diversification. You hear it all the time everywhere. Even Jim Cramer who many serious investors don't like, will say it and have many agree with him. Well most people with exception to Warren Buffet. This isn't about Jim or Warren but me and you. Well apparently I was diversified based on the true definition. But when the market tanks 200 points in a single day, you really find out if you are or not. Without naming individual stocks to my portfolio, I will name their general sectors and show you that diversification doesn't always work:
So where exactly does diversification help? I am losing on my top picks in my portfolio and every stock in the portfolio is negative. I find it hard for someone to say that my picks overlap with one another. Hmmmmmm....
Maybe Warren Buffet was right all along "Wide diversification is only required when investors do not understand what they are doing"