Smart Diversification: Avoid Over-Investing, Focus on Asset Classes for Better Returns

Overview

This article explains that owning too many investment funds or stocks can actually reduce the impact of your winners and doesn't significantly lower risk, leading to "over-diversification." True diversification involves strategically allocating your money across different asset classes like equity, debt, and gold, which have different risk and return behaviors. Debt, in particular, is highlighted as an undervalued tool for stability and consistent returns, crucial for long-term wealth creation by helping investors stay invested through market cycles.