Spreading across different things lowers risk more than it lowers return.
Don’t put everything on one outcome.
It is January 2000. You have €10,000 in ten chips.
One card can fall almost to zero. A split never does.
← Red LinesRed Line 15 of 48 The idea The numbers Where you see it Where it bends This game’s numbersHow strong the proof isAStrong proof Where it comes from
Two things that move differently soften each other. When one falls, the other often holds, so the mix shakes less than either part.
One goes +20%, −10%, +20%… The other −10%, +20%, −10%… Each alone grows about 3.9% a year. Half and half, put back to half each year, makes +5% every year: smoother and, here, even more.
A world index fund holds over a thousand companies across many countries and industries: one buy, spread wide.
Owning many things that all fall together is not spreading. Ten tech shares are one bet, ten times.
Yahoo Finance, historical pricesdigrin, monthly price history (second check)
The maths of spreading and decades of data agree: owning many different things cuts risk sharply, and one share alone usually does worse than the market.
- Portfolio Selection Harry Markowitz, The Journal of Finance 7(1), 77-91, 1952
- How Many Stocks Make a Diversified Portfolio? Meir Statman, Journal of Financial and Quantitative Analysis 22(3), 353-363, 1987
- Do Stocks Outperform Treasury Bills? Hendrik Bessembinder, Journal of Financial Economics 129(3), 440-457, 2018
Checked 2 Nov 2026 · How we grade
- A Strong proof: Many good studies or long official data, from different teams or countries, point the same way.
- B Good proof, with limits: Solid studies agree on the direction, but the size varies, or the data covers few places or few kinds of people.
- C Mixed proof: Some good studies for, some against, or the evidence covers only part of the line.
- D Thin proof: Mostly one book’s argument, one survey or stories. It may be wise, but it has not been tested well.
- = True by the sums: It follows from arithmetic, so no study can overturn it. We still show what real data says.
Harry Markowitz, “Portfolio Selection”, The Journal of Finance (1952). In our words, not quoted.
See it in numbers: Index funds (From Zero)
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