What strategy lies behind the portfolios of legendary investors like Warren Buffett, who maintain a similar percentage in different stocks?

It's easy to assume that this approach is based solely on diversification. However, there is a deeper and more strategic logic behind this practice that deserves to be explored.

1. Knowledge and Understanding of the Business

Buffett is known for his Value Investing approach, which involves investing in companies he considers undervalued relative to their true intrinsic value. This approach is based on a deep understanding of the companies he invests in. He analyzes to ensure he understands the business model, competitive advantage, and management of the company. This allows him to allocate capital by choosing companies with solid growth potential.

2. Long-Term Risk Reduction

This capital allocation helps mitigate risk. Although Buffett has concentrated his investment in a few key companies, his overall strategy involves maintaining a balanced portfolio to withstand market volatility. Protecting himself against the possibility of a single investment failing. This is relevant in an uncertain market environment.

3. Focus on Long-Term Value

Buffett is a firm believer in long-term investing, which is why he also focuses on sustained growth. This approach allows him to benefit from capital appreciation over time, rather than seeking quick profits.

And what if we apply this logic to investing in cryptocurrencies, where volatility and risk abound, starting from the fact that we do not know how to invest? If we subscribe to an Index-Linked Investment Plan (Top 10) with DCA and invest 1 dollar daily for 6 months applying Buffett's logic, assuming the Index has an average return of only 20%, you would have a total gain of 36 dollars plus your investment capital of 180$ , totaling 216$ in 6 months without doing anything more than investing 1 dollar daily.

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