Diversification is behaviorally robust because it helps investors remain calm and stable through market ups and downs.

“part of the beauty of 60/40 is that it's it's behaviorally robust. That 40% piece will keep you calm when that 60% piece is making you really scared.”

Gajendra Kothari argues that while traditional diversification is suitable for most people, an aggressive investor focused on maximizing returns should concentrate on high-conviction, contrarian bets.

“So I see asset solution two ways. One is diversification. That is right for 99% of the people in the world. Top 1% club doesn't think that way.”

Investing in real estate is a beneficial way to diversify beyond just stocks and ETFs.

“real estate will help diversify your portfolio because if all you have is stocks or companies or ETFs even you still are only in one type of asset class we want to broaden that a little bit and get your money somewhere else”

A 30-year-old investor should prioritize equities, specifically US markets for liquidity, while diversifying across emerging markets like India, Central Europe, and ASEAN to capture growth trends.

“So first of all I think around uh 40% of your money should be invested into equities. >> Okay. >> Now within those 40% I'm talking about say or at least 50% should be into equities in that 30% to US markets >> because US has the highest liquidity as we speak.”

Holding too many assets or funds causes investors to lose control and fail to generate significant alpha.

“You will lose control. Yeah, you will not have alpha. Your fund manager cannot give you alpha. How will he rebalance? Because you will have allocation of 2%, 3%.”

Bonds remain an effective long-term diversifier for equity portfolios because they provide both income and potential stability during market downturns.

“we do believe that bonds are an effective diversifier to equities. It doesn't hold every minute of every day, but it holds over the long run.”