Hi Mark-
<<"Diversification is really just another way of saying lowering risk."
Yup, that's my thought in a nutshell.>>
Altho diversication lowers risk, that`s not the whole story. If I understand the academic studies properly, risk is lowered AND returns are slightly better. Of course this assumes that diligent rebalancing occurs in a systematic way. It seems counter-intuitive that a more conservative scheme produces better results but that seems to be the case.
For better or worse, most investors think that Buffet-like, they can pick stocks that will far outdo the market. Again, I believe that studies show that most will do worse--the main exceptions being US!!
Regards,
J
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