Your portfolio will get to a certain size that, if you do not manage its exposure to volatility, your portfolio might not be able to last long to generate adequate cash flow for your use.

I seen a lot of good investors, and mediocre investors generate an astounding rate of return these past 10 years.

The reason they could do that can be a mixture of good investment processes and also favorable luck.

What I noticed as well is that their portfolio tend to be concentrated as well. They put in the effort to prospect, watch the stock carefully, focus on following the daily on-going news flow affecting their small portfolio of stocks.

They weed out the non-performing ones, and let the well performing ones run.

This is a very active management.

They are no different from a business man putting their heart, brain and sweat into it. The reward …