Ch.12 · Model Portfolios and Asset Allocation · hard
What is 'diworsification' in the context of mutual fund portfolio construction?
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EXPLANATION
Diworsification occurs when an investor holds too many funds — often 15-20 or more — that largely invest in the same stocks. The portfolio effectively becomes an expensive, over-complicated index. True diversification comes from spreading across genuinely different asset classes, fund categories, or geographies — not just different AMC names.
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