Don't Over-Diversify!

Warren Buffett has been quoted as saying this about diversification. "The only people who diversify are those who really don't know what they are doing."

What Buffett is telling us with that statement is this: You can't be a Tiger Woods in investing. When you spread your energies and your capital too many ways, you are courting disaster!

If you have really taken your time and only picked stocks that are bona-fide winners, then there's no need to diversify for safety.

If you're not supremely confident about each stock in your small portfolio, then perhaps you should have never invested in them in the first place.

Remember, the fewer stocks you have, the more time you can spend becoming an expert on them.

Buffett rarely owns more than ten, and much of his capital is tied to just two or three.

Now that's focus!

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