The Many Sides of Diversification: Spreading Your Bets Across Stocks, Factors and Asset Classes

The idea of diversification is simple. Most investors understand that spreading your bets and avoiding overconcentration is a good idea. But the details behind how to do that can be much more complicated. In this episode, we take a deep dive into diversification. We look at the number of stocks a portfolio needs to be diversified, the importance of factor diversification, whether a portfolio with only stocks and bonds can be considered properly diversified and why rebalancing is an essential part of diversification.

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  • 00:55 – The different ways to look at diversification
  • 03:04 – How many stocks do you need to be diversified?
  • 05:01 – Systematic vs. idiosyncratic risk
  • 07:23 – The linkage between behavior and diversification
  • 10:43 – The importance of factor diversification
  • 20:09 – ESG and the importance of understanding what drives stock returns
  • 24:53 – Is Justin diversified?
  • 29:49 – Can a portfolio with just stocks and bonds be diversified?
  • 41:46 – Why rebalancing is essential for diversification

Originally Posted September 25, 2023 – The Many Sides of Diversification: Spreading Your Bets Across Stocks, Factors and Asset Classes

2 thoughts on “The Many Sides of Diversification: Spreading Your Bets Across Stocks, Factors and Asset Classes”

    1. Hello Robert, unfortunately there is no transcript for this podcast/ video. We appreciate your interest in creating a transcript and have passed on your recommendation to the appropriate team.

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