{"product_id":"stcov333fiyo","title":"Stocks \u0026 Commodities V. 33:02 (34-36): Fine-Tuning Your Risks by Dirk Vandycke","description":"Fine-Tuning Your Risks by Dirk Vandycke\u003cbr\u003e\u003cbr\u003eBeyond The Obvious\u003cbr\u003e\u003cbr\u003eIn this second of a two-part series on managing risk, we look at how to overcome the disadvantages of diversification.\u003cbr\u003e\u003cbr\u003eIn part 1, it became clear that we need to bring profits and total return into the equation to evaluate the effects of diversification. However, its necessary to look beyond its common risk-lowering incentive and gain a more holistic view of diversification. While the advantages on the risk side are beneficial to all traders, from expert to layman, you mustnt be blind to the disadvantages, mostly on the profit side. Diversification will spread risk, and hence lower it, but at the cost of averaging your returns. Lets see if we can put this knowledge into practice.\u003cbr\u003e\u003cbr\u003eDIVERSIFICATION vs. CONCENTRATION\u003cbr\u003e\u003cbr\u003eStatistical expectancy tells us we have more control over the average size of winners and losers than over how frequently they occur. But frequency plays a role in profitability, so instead of trying to increase the numbers of winners while decreasing the number of losers, perhaps you should shift your focus to minimizing the size of losers and maximizing the size of winners.","brand":"store-traders-com","offers":[{"title":"Default Title","offer_id":52134098993521,"sku":"V33C02_928VAND","price":2.95,"currency_code":"USD","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0900\/3843\/6209\/files\/unnamed_554f9320-106c-443d-bb2d-12d6611a0890.jpg?v=1739666389","url":"https:\/\/shop.traders.com\/products\/stcov333fiyo","provider":"Stocks \u0026 Commodities","version":"1.0","type":"link"}