Hi BigI think there is a mid point between the two positions. We...

Hi Big

I think there is a mid point between the two positions. We all have different risk profiles. Mine is fear of losing everything. That fear would not be appeased by holding ten or twenty different shares because shares are a single asset class.

To prevent losing everything events diversification across asset classes makes sense. So holding cash, real estate, a share or shares, precious metal/s and collectibles provide this protection.

Holding $5, $10, $50 and $100 notes in cash is not diversification nor is holding residential, retail and commercial real estate and the same applies to equities.

A person who holds 100 different equities who does not understand every single one in great depth and only checks on them once a year is taking huge risk compared with someone who holds one share and knows it inside out and monitors its performance on a daily basis.

The diversification line can be traced back to investment advisors and portfolio managers as they make more money by rebalancing your portfolio as it’s called.

So the idea of holding one share if you understand the company properly is not unreasonable. Some investors have only ever held Berkshire Hathaway shares and it most definitely is not diversified across all asset classes in the share market and they have done very nicely.

Ignorance of what you have invested in is never a defensive position whether you hold one share or 100.

My opinion only DYOR
FF

AKIDA BALLISTA