2025-02-05
6 分钟The Economist Hello, Mike Byrd here, co-host of Money Talks,
our weekly podcast on markets, the economy and business.
Welcome to Editor's Picks.
We've chosen an article from the latest edition of The Economist,
which we very much hope you'll enjoy.
What is the best piece of investment advice you could fit into a single short sentence?
Buy stocks wins points for brevity and high returns.
Buy American stocks, if given at almost any point over the past few decades,
would have done even better.
Don't waste money on stock pickers' fees deserves an honorable mention.
Here is a less punchy suggestion.
A diversified portfolio can have the same returns as a concentrated one with less risk.
Diversification is such an important idea in modern finance that it is easy to forget its age.
The economist it is most associated with is Harry Markowitz,
who won a Nobel Prize for setting out its maths in the 1950s.
But the practice, if not the theory, was popular long before that.
During the first heyday of financial globalisation in the early 20th century,
European investors could hardly get enough of foreign assets.
A survey by Charles Conant, a journalist, published in 1908,
estimated that between a quarter and a half of the average British portfolio was invested abroad.