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Diversification
Buy and Hold
Dollar Cost Avg
Arbitrage

Concentration
Term category: Strategies
In 10 words or less: A strategy of investing in only a small batch of stocks.

Definition: A concentration strategy involves picking a small batch of stocks, investing in them, and following them closely.

StockJargon Advice: The opposite of concentration is diversification, which involves buying a large batch of stocks.  Because diversification removes some of the investing risk, concentration is seen as a riskier strategy.  However, the potential for returns is slightly higher and investors who own concentrated portfolios make the argument that they know more about their stocks because there are fewer of them.

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Related Books

The Five Rules for Successful Stock Investing by Pat Dorsey
Reminiscences of a Stock Operator By Edwin Lefevre
The Intelligent Investor by Benjamin Graham
Beating the Street by Peter Lynch

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