Concepts
Diversification
Risk reduction by spreading capital across many uncorrelated positions.
Diversification is the core risk-management principle of Harry Markowitz's modern portfolio theory: spreading capital across many uncorrelated assets reduces overall risk without requiring expected return to fall proportionally.
Highly diversified 13F portfolios with hundreds or thousands of positions are typical for quant funds like Renaissance Technologies or Two Sigma, as well as index replicators such as Vanguard. They contrast sharply with the highly concentrated value portfolios of classic stock pickers.