Many problems have a single "correct" answer (convergent). Investing is different; it's a "divergent" problem where key questions require balancing opposing virtues: concentration vs. diversification, patience vs. urgency. Success lies not in finding a single rule, but in intuitively harmonizing these tensions.

Owning multiple stocks or ETFs does not create a genuinely diversified portfolio. True diversification involves owning assets that react differently to various economic conditions like inflation, recession, and liquidity shifts. This means spreading capital across productive equities, real assets, commodities, hard money like gold, and one's own earning power.

The real benefit of diversification is matching assets with different time horizons (e.g., long-term stocks, short-term bills) to your future spending needs. All asset allocation is ultimately an exercise in managing financial goals across time.

A more robust diversification strategy involves spreading exposure across assets that behave differently under various macroeconomic environments like inflation, deflation, growth, and contraction. This provides better protection against uncertainty than simply mixing asset classes.

Bridgewater's Co-CIO argues the winning formula of the last 15 years—concentrating capital in US equities and illiquid assets—is now a dangerous trap. He believes most investors have abandoned diversification because it hasn't worked recently, creating a risky setup that calls for a globally diversified portfolio.

BlackRock's CIO of Global Fixed Income argues that unlike equities, fixed income is about consistently getting paid back. The optimal strategy is broad diversification—tilting odds slightly in your favor and repeating it—rather than making concentrated, high-conviction "bravado" bets on specific market segments.

The goal of diversification is to hold assets that behave differently. By design, some part of your portfolio will likely be underperforming at all times. Accepting this discomfort is a key feature of a well-constructed portfolio, not a bug to be fixed.

The sign of a working diversification strategy is having something in your portfolio that you're unhappy with. Chasing winners by selling the laggard is a common mistake that leads to buying high and selling low. The discomfort of holding an underperformer is proof the strategy is functioning as intended, not that it's failing.

Investor Mark Ein argues against sector-specific focus, viewing his broad portfolio (prop tech, sports, etc.) as a key advantage. It enables him to transfer insights and best practices from one industry to another, uncovering opportunities that specialists might miss.