Advisors know that diversification should limit risk, but holding too many positions can dilute the benefit from having picked a big winner. In fact, many actively managed equity funds hold so many stocks that they become "index huggers," and simply mimic the performance of their benchmarks - at a higher cost to investors.
All Financial Planning articles are archived after 7 days. REGISTER NOW for unlimited access to all recently archived articles, as well as thousands of searchable stories. Registered Members also gain access to exclusive industry white paper downloads, web seminars, blog discussions, the iPad App, CE Exams, and conference discounts. Qualified members may also choose to receive our free monthly magazine and any of our daily or weekly e-newsletters covering the latest breaking news, opinions from industry leaders, developing trends and growth strategies.