Diversification isn’t always the best thing

Diversification is extremely important for many investors, however Warren Buffett tends to disagree with the idea.

According to Buffett, diversification is for people who don’t know much about investing. An experienced investor should be able to choose stocks on a long-term basis and should have faith on these investments.

Investors choose to diversify their portfolios because of the fear that one stock might crash their entire portfolio; however it becomes much harder to keep track of the current events impacting each company. So, by diversifying, you might reduce the volatility of your portfolio, but at the same time you reduce your focus on individual investments.

Instead wait for opportunities to buy good quality stocks at a good price. The key hereā€¦ is waiting.

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