Sometimes it’s fine to be boring

Diversification puts portfolios in the middle of the pack – where investors feel safe, writes Antonia Lim

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Diversification shaves off the extremities of performance and creates portfolios that are never the best, never the worst – steady, boring even.

That’s ideal. Most long-term investors don’t tend to sell what’s slightly boring; they sell what they’re afraid of. Staying invested is crucial for clients to achieve their financial goals and for managers to keep managing.

But how should investment managers measure diversification, and – just as importantly – communicate that choice to the client?

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