Andrew Hardy: The free lunch of diversification

Because it's worth it

clock • 4 min read

There ain't no such thing as a free lunch - or is there? Andrew Hardy discusses the merits of a truly diversified portfolio and says while performance versus expectation this year may have disappointed it should still be the strategy of choice for long-term investors

Not that there aren't enough acronyms flying around the investment world already, but today I will reference a lesser-known one - only to debunk it.  TANSTAAFL or "There ain't no such thing as a free lunch".  The etymology is uncertain, but the principle is intuitive; there aren't many things in life that come for free without some form of cost, be it direct or indirect, explicit or implicit. However, there is one (and only one) in finance - diversification.  Most famously highlighted by Harry Markowitz, Nobel Laureate and pioneer of investment theory, this has underpinned several dec...

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