One of the major issues in constructing a winning stock portfolio is diversification. At first glance, we tend to see diversification as in selecting different kind of stocks in our stock portfolio to hedge against unsystematic risk. This is not entirely the case.
We should treat diversification at a more profound level as in diversifying our investment over different time horizon -- meaning to invest at different time even it's the same stock that we had previously put our money in. Say, you have 10k to invest, and you really like to invest into a particular counter that promises bright future prospect. Even the counter looks cheap now, you should not put all 10k into that counter at the same time. Just make a partial investment. If the counter rises some more, good. Your previous investment is making money now. Buy some more. If the counter drops, even better. You get a cheap sale for that counter.
So the conclusion is that we should diversify not only in different counters, sectors, or financial instruments. But also at different time even for the same counters, sectors, or financial instruments.
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