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For part of your portfolio yes but once you have a decent amount (when say your normal size of order is £2k) you want to start diversifying and playing on speci
by walshemj 9y ago
For part of your portfolio yes but once you have a decent amount (when say your normal size of order is £2k) you want to start diversifying and playing on special sits and corporate actions.
An example from the UK electra private equity ELTA was on a massive discount activist investors came in and I made over twice my initial investment in two month - I would have busted my yearly allowance for dividend income just on that stock alone.
- pedrocr 9y agoYou can't diversify more than just holding the total market. And since market returns are zero sum for you to make that great profit someone else had to lose. I'll just take the market average at very low fees and not worry about it. That's what the first link explains.
- walshemj 9y agoYou can diversify across markets (different countries) and sectors and also to lay off risk, but I have been investing starting slowly with index funds 20 years ago so I think I have more experience. I brought a commercial property fund when office prices crashed it tripled in less than 10 years.
- pedrocr 9y ago>You can diversify across markets (different countries) and sectors and also to lay off risk And you should. The ultimate goal is to own a cap weighted proportion of all the assets in the world. If you do anything other than that you're taking an active bet that some assets will do well and some poorly and someone else is taking the other side of that bet. The sharpe article is quite revealing.