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Diworsification: The Problem With Spreading Your Portfolio Too Thin

The concept of diversification has long been hailed as the holy grail of investing. The idea is that spreading investments across different asset classes may reduce risk and create a more stable portfolio. However, there is a growing concern that diversification can lead to over-diversification and a poorly performing portfolio. This is known as diworsification

Diworsification is a result of adding assets to a portfolio simply for the sake of diversification without considering whether those assets will actually benefit the overall investment strategy.

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This post appeared first on Technical Traders Ltd.