Seeing the Big Picture

Barry Ritholtz is on vacation this week, so he asked me to contribute a guest post to his wonderful blog, The Big Picture. You may read it here. A quick quote follows.

One practical investment tidbit to take from this cognitive shortcoming is that investors tend to like diversification more in theory than in practice. They like the idea of diversification preventing loss but hate the idea (as in 2013) of diversification suppressing gain. Every money manager has met with a client after a great year and heard only about the position(s) that didn’t do as well rather than the great overall performance. As my wife often tells me (partly in jest), I don’t want much, I just want more.

Seeing the Big Picture

About these ads

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s