No. of Recommendations: 4
>>Check out this study by Dr. William Bernstein.

The 15-Stock Diversification Myth

In order to investigate this problem, I looked at the stocks constituting the S&P 500 as of 11/30/99, and formed 98 random equally-weighted 15-stock portfolios for the 12/89-11/99 10-year holding period. Below is a histogram of the annualized portfolio returns:


Astonishingly, 69 of the 98 randonly selected portfolios Bernstein examined beat the S&P500 annualized return of 18.94% per annum for that 10 year period. Hard to see how that's bad and something to be avoided.<<

I'm confused. The article you link to explains exactly why it's something to be avoided.

Who vaguely recalls seeing this same snippet cited before to support exactly the opposite conclusion that Bernstein draws in the article
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