To Diversify or Not to Diversify by Robert Kiyosaki Utility Links
Printable View Email this Page Monday, November 28, 2005 Warren Buffett, one of the world's greatest investors, said, "Diversification is a protection against ignorance. It makes very little sense for those who know what they are doing." Two Factors That Justify Diversification
So why do financial advisors recommend diversification when the world's greatest investor chooses not to diversify? I believe there are two answers to this question.
Active vs. passive investing. There are active and passive investors. Warren Buffett is an active investor. Most people are not. Active investors should focus. Passive investors should diversify.
Risk. Some investments are riskier than others. Stocks, bonds, mutual funds, and real estate investment trusts (REITs) are very risky investments, hence you should diversify if you invest in them. If you invest in businesses, as Warren Buffett does, or real estate, as I do, you should focus.http://finance.yahoo.com/columnist/article/richricher/1649