To The Moon

💡 Should You Diversify or Concentrate Your Portfolio?

It’s one of the most timeless dilemmas in investing:

👉 Should I own many stocks, or focus on just a few?

Before deciding, it helps to understand where each path truly leads.

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⚔️ Option 1: Concentration — Depth Over Breadth

You might recall Warren Buffett’s advice:

> “Put all your eggs in one basket — and watch that basket carefully.”

The philosophy behind concentration is deep conviction built on deep understanding.

You invest heavily in a company because you’ve studied it far more deeply than most. You understand its moat, leadership, products, and culture better than 99% of investors — even Wall Street analysts.

🎯 The goal: Life-changing wealth.

If your conviction is right — if you identify the next Nvidia or Amazon — your upside can be extraordinary.

⚠️ The risk: Catastrophic loss.

If that single basket cracks, your entire position can collapse. History has produced far more investors who failed from concentration than those who became legends.

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🌍 Option 2: Diversification — Breadth Over Depth

Diversification accepts a simple truth: no one can predict the future with certainty.

You acknowledge you can’t know which company will thrive or fail, so you own many quality businesses — allowing the market’s overall growth to work in your favour.

🎯 The goal: Survival and compounding.

Not to “get rich quick”, but to stay in the game long enough to build lasting wealth.

The easiest way to diversify?

Buy broad-market ETFs such as VOO, VTI, or VT. You’re not buying a single company — you’re buying the pulse of the global economy.

Even Buffett recommends S&P 500 index funds for most investors.

So why does he personally concentrate, yet tell others to diversify?

Because he holds himself — and his research process — to a far higher standard than he expects from others.

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⚖️ The Pragmatic Middle Ground: The Core-Satellite Strategy

For most thoughtful investors, the best answer lies in balance.

💡 Core (Defensive Army):

Low-cost index ETFs that form the foundation of your portfolio.

They let you get rich slowly while ensuring you never miss the market’s long-term growth.

🚀 Satellite (Special Forces):

Five to ten high-conviction companies you’ve researched deeply and believe in.

Their role: to give your portfolio the potential for outsized gains, while your core keeps you safe.

Even if your satellites fail, your base remains strong.

But if they succeed, they can transform your financial trajectory.

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📊 The Real Question

So, should you diversify or concentrate?

The answer isn’t in anyone else’s playbook — it’s in your own self-awareness.

How much time, effort, and emotional energy are you truly willing and able to invest in your portfolio?

There’s no single right path — only the one that matches your temperament, discipline, and understanding.

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💬 What about you?

Do you lean towards broad diversification, or do you prefer to build conviction and focus on a few winners?

Share your approach — I’d love to hear how you balance risk and reward in your own investing journey.

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