Oct 23, 2019
When we put effort into something, we expect to get the same amount of output, right? This can often be the case, but sometimes the rewards we get are not proportional to the risks that we take. For example, in portfolio construction, diversification only makes sense to a certain point before it "waters down" our overall returns. The Law of Diminishing Returns reminds us that we should be mindful of the inflection points in our investments and in our lives as well.