What are the risks of over-diversification?
An example of an AI chatbot conversation about the risks of over-diversification in investing.
What are the risks of over-diversification in my investment portfolio?
Over-diversification can lead to diminished returns, as your investments may become too spread out to capitalize on high-performing assets.
Can you explain how it affects my overall investment strategy?
Certainly! It can dilute your potential gains and make it harder to track performance, leading to a lack of focus in your strategy.
What is the ideal number of investments to have?
While it varies, many experts suggest having between 15 to 30 investments to balance risk and return effectively.
Are there any signs that I might be over-diversified?
Yes, if you find it challenging to monitor your investments or if your portfolio's performance is consistently underwhelming, you might be over-diversified.
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