A.I.M. Users Bulletin Board

[Rien]

Hi Mark, my previous post was a "cheap shot" in the sense that it oversimplyfied things. But in essense I do agree with it. To me, diversification is just too difficult to be used as a risk reducing mechanism. I rather use money management methods.

If you're trying to get rich, you still need to diversify or else you're exposing yourself to risks that, in all probability, will cause you to lose money over the long-term and inhibit you from getting rich.

I take it that you mean to say that once one has build a little wealth, this wealth needs to be protected. I guess that depends on the personal risk tolerance. For example when starting with $10,000 or even $100,000 it is next to impossible to make it to a million when one uses diversification. With those kinds of capital, diversification will prevent you from reaching a million IMHO.