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The article is discusses the different sources of diversification in a portfolio. However, it does not mention that diversification can also come from time diversification.

Time diversification is the idea that by investing for the long term, you can ride out short-term volatility and achieve better long-term returns. This is because over the long term, the stock market has historically trended upwards.

For example, if you invested $10,000 in the S&P 500 index in 1970, your investment would be worth over $500,000 today. However, if you had invested the same amount in 1987, just before the Black Monday crash, your investment would have lost half its value in a matter of weeks.

If you had stayed invested for the long term, however, you would have eventually recovered your losses and made a significant profit. This is the power of time diversification.

Of course, there is no guarantee that the stock market will continue to trend upwards in the future. However, over the long term, the odds are in your favor. This is why time diversification is an important part of any investment strategy.

Here are some additional thoughts on time diversification: 🏵️👇

Time diversification is not a guarantee against losses. However, it can help to reduce the risk of permanent losses.

The amount of time diversification that is appropriate for an individual investor will depend on their risk tolerance and investment goals.

There is no one-size-fits-all approach to time diversification. Investors should tailor their time diversification strategy to their individual circumstances.