“The only investors who shouldn’t diversify are those who are right 100% of the time.”

John Templeton's statement, "The only investors who shouldn't diversify are those who are right 100% of the time," emphasizes the importance of diversification in investment portfolios. John Templeton was a highly successful investor and mutual fund manager known for his contrarian investment approach and value investing principles.

In essence, Templeton highlights that every investor is infallible, and even the most skilled and knowledgeable investors will make mistakes or encounter unexpected market events from time to time. Diversification is a risk management strategy that involves spreading your investments across different asset classes, industries, or securities to reduce the impact of any one investment's poor performance on your overall portfolio.

Here's the key idea behind Templeton's statement:

1. Diversification Reduces Risk: By holding various investments, you spread your risk. If one investment performs poorly or fails, it won't have a catastrophic impact on your entire portfolio.
2. No One Can Predict the Market Perfectly: Templeton's statement acknowledges the inherent uncertainty in financial markets. Even the most seasoned investors will make incorrect predictions or decisions at times. Diversification helps mitigate the consequences of these errors.
3. Maintaining Consistency: Diversification might not be necessary if you have a perfect record of always making the right investment decisions. However, since such a perfect record is impossible to achieve, diversification is a practical approach to achieving consistent and more predictable returns.

In summary, John Templeton's statement underscores the wisdom of diversifying one's investment portfolio to manage risk and achieve more stable long-term returns, recognizing that only some people can consistently make correct investment decisions in a dynamic and unpredictable market.