Diversification that is not fake

Diversification means holding things that do not move together. Holding many things that move together is concentration wearing a disguise.

What genuinely spreads risk here

• Across sectors — banking, hydropower, insurance, manufacturing, hotels behave differently.
• Across asset types — shares, fixed deposits, and debt instruments do not move together.
• Across time — buying in instalments rather than all at one price.

There is also such a thing as too much. Thirty positions cannot be researched properly by one person, and a portfolio nobody understands is not diversified either — it is abandoned.

Check what one holding falling would do→