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No. of Recommendations: 1
I know that there's a lot of talk in the media about being overweight and underweight in market sectors, and I don't understand why I should care - I'm not trying to match the market.

I think the idea is that there are various forms of risk you expose yourself to when investing in stocks. On one end of the spectrum, a broad index (like the Vanguard whole world - VT) is exposed to world economy risk and index tracking risk. On the other end, PRO is exposed to world economy risk, sector risk, individual company risk, and stock picker risk. Risk managers like to talk about decreasing these as best they can, and from a 30,000 foot level it makes sense to spread your investments across various sectors to mitigate the risk that one sector takes a downturn and inordinately hurts your overall returns.

Personally, I agree that picking good companies trumps sector risk. That said, I wouldn't want a whole portfolio in any one sector. PRO is perhaps a little concentrated for my tastes but with the hedging, cash, and PRO team I'm able to sleep at night. ;)

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