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Thursday, 23 May 2019

Investment diversification may not come naturally to entrepreneurs

Entrepreneurs do a bad job at diversifying their investment portfolios: The same qualities that helped successful entrepreneurs build their businesses seem to prevent them from structuring a diversified investment portfolio, Lucy Warwick-Ching writes in the FT. The tenacity of entrepreneurs who believe in “making” their own luck through persistence and risk management in the face of overwhelming odds often find it hard to trust others with their hard-earned wealth — and they too often fail to embrace diversification as a risk-management tool, opting instead to remain invested in the assets and sectors with which they’re already familiar.

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