question archive Diversification is a protection against ignorance," according to Buffett

Diversification is a protection against ignorance," according to Buffett

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Diversification is a protection against ignorance," according to Buffett. "[It] makes very little sense for those who know what they're doing." Is Buffett right? Explain the Strategy of Diversification and discuss the power and limit of a diversification strategy. Why do the benefits from diversification depend on the correlation between the returns of the assets in the investor's portfolio? Discuss fully your answers.

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