All of us know about portfolio diversification by splitting your allocations up into different stocks. But recently I read an article on portfolio diversification over time. This is brought to my attention because a trigger-happy investor like me who can’t stop clicking ‘buy-buy-buy’ needs to remember the importance of diversifying over time before I exhaust most of my war chest in a buying frenzy.
For those who have been following the blog, you may have noticed that I can comfortably buy fairly-valued stocks like MasterCard or Priceline or sometimes ‘over-valued’ ones like Linked In. Of course I would be more than happy to buy it at a deep discount to value, but for that to happen, we may probably have to wait for a crisis as severe as the last one. Short corrections may occur over time, but by then, the stock may have already rose by a ......