Originally Posted by
SBQ
Diversification is a lame excuse by all the fund managers, that they don't know how to pick certain stocks, that will outperform the market so instead, they buy everything up and call themselves an expert because by chance, their fund portfolio marginally beats the market index return. and here we are, countless of individuals (like yourself) thinking they can do a better job than the fund managers can do.
As both Buffet & Munger have expressed over the decades, you have a whole industry in Wall Street that preaches this kind of behaviour; those in industry thinking they can beat the market returns for their clients. But do you know what's worse? The NZ financial industry preaching this nonsense to a higher degree. The FMA says trading derivatives is bad (like it's a sin out of the Bible and no NZ resident should be practicing that habit if they have an overseas foreign brokerage account because they aren't 'Nanny' licensed approved by the FMA). Instead of educating the public, they rather POLICE the public.
If you're going to go the diversification route ; just buy an index ETF like the S&P500. But even here in NZ, there's a habit of gouging by fund managers that do nothing more than just buying the S&P500 and jack up the management fees. For eg the Vanguard ETF range has an average mgt fee of 0.08% per year - lowest in industry. Yet Kiwi Saver funds buy their VOO, then then come out charging like 0.5% to as high as 1% a year for merely doing??? C'mon FMA, why aren't you going after these funds in NZ?
I have friends in both Singapore and Sweden. Their gov'ts don't nanny them on the dangers of investing overseas. They freely buy & sell stocks and options on their US based brokerage accounts and side on education being the key to achieving financial freedom. A LOT more can be done in NZ but gov't isn't serious and doesn't seem to care ; keep the $ flow into NZ real estate.