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ARTICLE · 20 MARCH 2026

Tilting At Windmills: Defending Overconcentration Claims In Today's Index-Driven Equity Markets

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Sancho Panza dispensed this practical wisdom over 400 years ago, and his sage advice survives as a fundamental tenet of Modern Portfolio Theory.

United StatesFinance and Banking
David Goldberg
David Goldberg
Zachary Schmitz
Zachary Schmitz
Alexa Warner
Alexa Warner
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"It is the part of a wise man to keep himself today for tomorrow and not venture all his eggs in one basket." Miguel de Cervantes, Don Quixote (Part II, Chapter 43) (1615)

Sancho Panza dispensed this practical wisdom over 400 years ago, and his sage advice survives as a fundamental tenet of Modern Portfolio Theory. The notion that individual investors should maintain a diversified basket of securities is among the most broadly accepted principles of investing. As Warren Buffett famously said: "Diversification is protection against ignorance." (Buffett added that diversification "makes little sense if you know what you are doing," but we can probably ignore that part since most of us are not quite as savvy as the Oracle of Omaha.)

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