Portfolio Diversification is a foundational concept in investing. It can be a rather basic and easy to understand concept. However, in its implementation, many investors make catastrophic mistakes with too much concentration and others settle for average performance because of over diversification.
Portfolio diversification is a balance between concentration and over diversification to optimize risk and potential return.
92 Insightful Quotes from The Most Important Thing by Howard Marks. One of the best value portfolio management books ever written. One of the best value portfolio management books ever written.
...Howard Marks delivers his commentary in a style that has been described as “insightful, direct, homespun, expert and sharply pointed”. His objective in writing The Most Important Thing was to provide a book that would lay out his investment philosophy in a manner that would be beneficial to the average investor.
His approach is to lay out The Most Important Thing Is….. in 20 Chapters. Each is a building block to successful investing. Together they create a “solid wall” in which each piece is essential “guideposts” that keep investors focused on the most important things for successful portfolio management.
...Our discussion of these 7 investment concepts will provide you with a different thought process or approach to investing. Successful value portfolio management requires a different way of thinking. Make the effort to be above average.
...A well constructed asset allocation plan can lower portfolio volatility and increase returns at the same time! That makes asset allocation more important than which individual investments you choose for diversification.
Many financial firms give you standard platitudes about asset allocation plans. I’m going to challenge you to think skeptically about some of their commonplace thinking. Most of them leave out important aspects, such as expenses and valuation, because it doesn’t fit the products they sell. Here are the factors that are important and my thoughts on each.
...A tactical asset allocation provides the value investor a dynamic investment allocation strategy that adjusts to favorable and unfavorable valuations. Instead of a strict fixed percentage you have greater flexibility because you can choose from a range based on valuation levels.
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As founder of the Arbor Investment Planner my passion is to educate and empower the individual investors to manage their own investment portfolio.
The Arbor Investment Planner is a value investment portfolio management guide for those individual investors who choose to manage their own money. I focus on ideas and concepts important to the self directed investor; but put special emphasis on risk management, value investing strategies, and proper asset allocation and diversification.
- Ken Faulkenberry
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