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 ......