What is True Diversification?

This week we take a look at one of the more common problems I see as I counsel investors, a lack of diversification. Much of the time that stems from not having a philosophy of investing and defaulting to simple selections that over time can create problems when those selections run into a bit of volatility.

Good friend and successful money manager Gary Marks gives us some thoughts on diversification. Gary has written a book called Rocking Wall Street that is the first in what I hope is a series of books with the Millennium Wave imprint. I have written the forward to it. The book is extremely useful in helping you develop a philosophy of investing that will weather the test of time, as well as explain specific strategies and techniques for creating your own diversified portfolio that will help you balance the risk and rewards of the markets.

At least some brokerage firms are clearly not happy about Gary's book. A highly complimentary statement about Gary's strategies by a senior portfolio manager at a major brokerage firm led that firm's compliance department to issue a written warning to Mr. Marks not to use his quote to promote the book.

Why is this book rocking Wall Street? In this edited excerpt from the book, Gary touches on some of these controversial points, such as what if traditional diversification models were debunked as too risky
and ineffective?

You can (and should!) get your copy of this well written, easy to read book at http://www.amazon.com/exec/obidos/ASIN/0470124873/frontlinethou-20.

And now, let enjoy today's Outside the Box.