Risk Management Is Real Diversification
For decades, the investment industry has promoted diversification as the answer to risk.
Own stocks. Own bonds. Add a few additional asset classes. Rebalance periodically.
The assumption was simple: different investments would behave differently enough to protect investors when markets became difficult.
But over time investors have learned uncomfortable lessons. Diversification is not the same thing as risk management.
When market stress arises, the question is not how many holdings a portfolio owns.
The question is whether the portfolio was built with enough risk management guardrails to keep investors from jumping ship.
Source: https://etfdb.com/etf-strategist-channel/risk-management-real-diversification/
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