Diversification is the only strategy that leads to a higher-than-market-average return.

Question

Quizplus · Accepted Answer

Diversification is one strategy to reduce risk, but it does not guarantee a higher-than-market-average return. Other strategies like market timing, researching and selecting individual stocks, and value investing may also lead to higher returns, but they come with higher levels of risk. Ultimately, the effectiveness of a strategy depends on the specific circumstances of the investor and the market conditions at the time.

Diversification Is the Only Strategy That Leads to a Higher-Than-Market-Average