FYI: I got an email from a reader which touches on so many interesting points that I wanted to share and answer him here.
I have a 401(k) through my employer and invest mostly in a passive strategy indexed to the S&P. I have a friend who like me has a 401(k) through his employer. Where we differ, is that he allocates his “side” portfolio to one asset – Facebook.
I try to highlight the dangers of being as concentrated in one asset as he is.
His counter-argument is quite consistent – he’s beating me. Consistently, and by a lot.
While I would never consider being so concentrated with my own portfolio, I do often think about a strategy adjustment to significantly overweight Facebook, Apple, Google, Amazon, Netflix. Even if one of them crashes, the gains that the remaining 4 have been producing would still have a better yield than S&P
Regards,
Ted
http://theirrelevantinvestor.com/2017/05/06/my-friend-is-beating-me/
