what if you owned every financial instrument?

[hooligan]

maximum portfolio diversity: if you owned a portion of every conceivable financial instrument on earth

you could "capture" the way humanity changes what it values.

whatever is currently expensive, sell, and buy whatever is currently cheap. repeat.

print money by exploiting roving valuation.

[Investor87]

maximum portfolio diversity: if you owned a portion of every conceivable financial instrument on earth

you could "capture" the way humanity changes what it values.

whatever is currently expensive, sell, and buy whatever is currently cheap. repeat.

print money by exploiting roving valuation.

I didn't just want to take someones word for it that there are top players that own everything so I recently went to yahoo finance and looked up a bunch of major companies. FB, AAPL, GOOG, BA, etc, etc. I clicked on the "holdings" tab to see who the top holders are. There are about 4 that are always the top stock and mutual fund holders. vanguard, blackrock, fidelity and state street. Pick a major stock and they are there. Then I clicked on blackrock. Vanguard owns a big portion is all the same money. I couldn't look up who owns vanguard because they are a private company.

[Yodean]

maximum portfolio diversity: if you owned a portion of every conceivable financial instrument on earth

My immediate thoughts are that this would lead to mediocre returns.

A portfolio constructed in this manner wouldn't be the worst performing, but it wouldn't be the best, either.

[Eric]

maximum portfolio diversity: if you owned a portion of every conceivable financial instrument on earth

My immediate thoughts are that this would lead to mediocre returns.

This was also my knee-jerk reaction. Diversity just for diversity's sake is a great way to guarantee mediocrity.

"When the market tanks my [diversity] will prop up my account so I don't lose as much [on paper]." -John Q. Public

Yeah, and when the market is rocketing towards the moon your [diversity] is holding you back like a giant boat anchor.