nolesrule t1_j6p7e81 wrote
Reply to comment by [deleted] in Stupid question...why diversify? Why not dump all investment money in one low cost index fund? by [deleted]
Diversification decreases risk for a given return. Concentration increases risk. Don't confuse holding a collection of funds with diversification. Adding international to US increases diversification because your investment is spread among more stocks. Adding US small cap to a US total market index is concentrating in small cap because total US already includes small cap.
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