Diversification: An Expensive Lunch Recently, But Free Over Time

Diversification: An Expensive Lunch Recently, But Free Over Time

The Benefits of Diversification Ebb and Flow, But Now is Not the Time to Abandon the Time-Tested Strategy
One of the most important concepts taught to MBA students in Investments 101 is that portfolio diversification is fundamental to a sound investment strategy. In 1952, Harry Markowitz, pioneer of Modern Portfolio Theory, coined the oft-cited phrase, “Diversification is the only free lunch” in finance. Diversification has earned this reputation because of its ability to produce superior risk-adjusted returns over time.
 

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