Andrew Morris: To diversify … or not?

Diversification is one of the foundation stones of the investment industry. Clients are constantly reminded of the importance of maintaining a diversified portfolio as exposure to different asset classes and geographies perform differently across different market conditions. A more recent movement has, however, suggested this is actually unnecessary and that simply maintaining a low-cost exposure to the equity market will deliver a better performance over the long term, despite fluctuations in performance. Yet how well does this view stand up to scrutiny? Looking solely at the headlin...