[filoleg]

> To me diversification goes against all logic because the rule #1 of investing should be that you as a investor KNOW what you are investing in.

I largely agree with what you say. However, diversification has degrees, and it doesn’t necessarily mean that you gotta spray and pray across the whole range of S&P500 to be more diversified than the “all-in on a single stock ticker” strategy. Examples:

* All in one single stock ticker - no diversification

* All in a few different stock tickers that are in the same industry sector (that you are knowledgeable about) - diversified businesses, but not diversified across industries

* S&P500 spray and pray - largely diversified

Option #2 is imo the solid middle ground, and it gels perfectly fine with your idea that you gotta know what you invest in. Yes, it is riskier than option #3, because it doesn’t account for the scenario where the entire industry sector experiences a downturn. But it is still diversified, still has the potential to make you wealthy, and is not nearly as risky as option #1 (but also not as capped as option #3).