How too much diversification can hinder you in building wealth.
When space and time is traversed, profits can be made. As a stock trader, I cannot take a stock through space to arbitrage for profits as ancient traders once did. But there is another dimension I can arbitrage: time. The same way goods can increase in value through space like the Asia-to-Europe spice trade, stocks can increase in value through time.
In dog shows, the highest-ranked dog of each breed wins a “best of breed” award. This terminology was brought over to the stock investing world to describe equities whose underlying companies are leaders in their industry. I am not fond of the term “best of breed” for stocks, mainly because 1) companies aren’t animals, and […]
“I have some extra money. Should I use it to pay off my debt or invest in stocks?” If you have substantial personal/consumer debt (e.g. credit cards), you should focus on paying that off first before investing in any stocks. That’s because the average return for stocks historically–accounting for all the up years and down […]