Offer your thoughts or opinion on the input financial query or topic using your financial background.

Why would I want a diversified portfolio, versus throwing my investments into an index fund?
Diversification is extremely important and the one true "Free Lunch" of investing, meaning it can provide both greater returns and less risk than a portfolio that is not diversified. The reason people say otherwise is because they are talking about "true" portfolio diversification, which cannot be achieved by simply spreading money across stocks. To truly diversify a portfolio it must be diversified across multiple, unrelated "Return Drivers." I describe this throughout my best-selling book and am pleased to provide complimentary links to the following two chapters, where I discuss the lack of diversification from spreading money solely across stocks (including correlation tables), as well as the benefits of true portfolio diversification: Jackass Investing - Myth #8: Trading is Gambling – Investing is Safer Jackass Investing - Myth #20: There is No Free Lunch