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Sorry to disagree, but I must. The rationale for diversification is that different asset classes act in different ways. The technical term for it is correlation factor. For example, large cap value stocks and small cap growth stocks are not perfectly correlated and will perform differently. That is why a well-diversified portfolio will hold as many as 10 different asset classes.

Since it is not possible to consistently predict which asset class will outperform in the next year, portfolios are diversified so as to own some of each. This will absolutely guarantee that the portfolio will not outperform any individual asset class during any one period, but it will guarantee that the owner of that portfolio will not get caught in the same situation that Enron or Worldcom employees were.

We can always tell each other where we should have been to make a fortune if we could go back in time. Unfortunately, my “wayback machine” is acting up.

WARNING - This is certainly for advanced investors only.

I too was raised on the sacred doctrine of diversification.

And yes, there is always something good happening in one of a diverse group of real estate, resources like metals and energy, technology, health-care, interest bearing securities and businesses, etc.

From what I have read and experienced, the most successful do not 'cut the flowers and water the weeds'. They ride a winner for as long as possible, and the more leverage they carry on the winner, the better.

Now, if we are wanting to retire in 40 years on a modest but stable base, we should highlight safety, keep working at a steady job, invest $100 per week in a solid mutual fund, etc.

Or, if not, open your eyes wide, spot the fundamentally-sound trend in vogue, for example, investment real estate, and just go for it with both barrels.

What you will do in a single year will humble your entire past efforts, including your job income however honorably earned.

When the fundamentally-sound trend becomes momentum only, get ready to bail.

Then, shop wisely, and invest in the next fundamentally-sound trend.

I have leap-frogged entire generations of wealth because of this amazingly-safe philosophy.

The key is finding fundamental value (i.e. backed by defineable earnings and income), and having your entire focus on making it work.

Repeat - never let your eye off the ball.