There are three reasons:
1. Diversification sucks. There I have said it. There is an open secret in the investment world that diversification is for suckers or at least for folks that will never capture wealth. You see, mutual funds were invented as a marketing strategy. After academic finance disclosed you could reduce risk (variance) by diversification, astute Wall Street companies knew they could market this to average folks. Previous to mutual funds and the idea of diversification the average person felt that investing in the stock market was akin to gambling and shied away from it. But those folks in Wall Street knew a good marketing opportunity when they see one and ran with it.
Warren Buffet is quoted as saying “Diversification is a protection against ignorance. It makes very little sense for those who know what they’re doing.”
In the video below Buffet recomends applying intensity to your investing strategy to get above average returns.
If you are ready to apply intensity to your real estate investments on your way to Retirement Freedom, call us at (925) 324-8626.