MSCI - Buy These 3 Stocks During The Next Pullback And Diversify Your Portfolio
2024-02-03 05:08:09 ET
Summary
- Diversification is a fundamental rule in investing, yet the richest people in the world have built their wealth through concentrated bets.
- The S&P 500 index lacks company and sector diversification, with the top 5 companies holding a significant portion of the index.
- The typical investor should consider diversifying beyond market cap-weighted indices to achieve a sufficient level of portfolio diversification.
- Today, I present to you three quality businesses to add to your watchlist and consider for buy during the next market pullback.
Don't put all your eggs in one basket.
You might have heard this saying many times before. Many investors argue in favor of diversification to minimize the risk of losing capital, making it a fundamental rule in one's investment objectives.
Yet when we look at the top 10 richest people on the planet we clearly realize that focusing on a single venture has fueled the wealth of many.
9 out of the 10 richest people are founders of successful businesses, with Warren Buffett being the sole investor in the top ten with Berkshire Hathaway ( BRK.B ). Examples like Elon Musk with Microsoft (MSFT), Bernard Arnault with LVMH (LVMHF) and Mark Zuckerberg with Meta ( META ) demonstrate how concentrated bets can lead to immense wealth.
However, replicating their entrepreneurial success and deep business acumen isn't easy for everyone....
Buy These 3 Stocks During The Next Pullback And Diversify Your Portfolio