3. Look for intersections.
However, sometimes diversification can be misleading. This is the importance of the third principle - look for hidden points of intersection.
Many of the most successful equity mutual funds in recent years have preferred the shares of technology companies, especially: Facebook Inc., Apple Inc., Amazon.com Inc., Alphabet Inc. (aka Google).
Such a "diversified" portfolio essentially relies on the same assumption that technology companies will continue to grow.
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