This level of diversification not only means that investors are exposed to a broader range of potential return - boosting opportunities but are also protected from the risk that
the failure of a single investment could cause material damage to the overall portfolio.
Michael Mauboussin said «I can say categorically that the
single greatest error I have observed among
investment professionals is the
failure to distinguish between knowledge
of a company's fundamentals and the expectations implied by a stock price.»