We are told that diversification is the key to successful investing. Allocate some money into the share market, listed property, fixed interest, global shares, bonds, fixed interest etc. We are even told to diversify amongst different fund managers. Then each fund manager diversifies further and spreads their own money between something like 100 companies. I'm not sure of the benefit of doing this. Basically seems to make a portfolio so complex and watered down that you will only get a very basic return. Looking at returns from international equity funds, no one seems to have made any money over the last 5 years, but they continue to collect fee's. I can see the benefit of say having a direct holding in a investment property, and say Australian shares, as these two are completely different investments.. but to diversify further I can't see the point. If your using a financial planner, it will cost you thousands for them to 'draw up a plan' and select several funds, then they present you with a nice book with colorful charts, morning star ratings and expected returns. Will such a plan outperform say a generic multi-fund managed fund? will these returns outperform say if you selected a Australian share fund and contributed on a regular basis into it and kept your investing simple? I look forward to your view and feedback, because from where I'm standing, I think selecting 1 or 2 quality managed funds is better and cheaper than having a complex plan drawn up with a selection of many funds. It could even be better to avoid managed funds all together and select 6-7 shares and buy them up regularly and avoid the 1-2% MER fees which are loaded onto funds.