When investing, it is important to diversify, which brings to mind the famous saying, "Don't put all your eggs in one basket." Perhaps there should also be a second part to this saying: At the same time, be careful not to let all the baskets be on the same vehicle.

In the process of asset allocation, it is necessary to be extra cautious of "pseudo-diversification." Pseudo-diversification appears to be a diversified allocation on the surface, but the underlying drivers of asset returns are highly similar. Therefore, when the market fluctuates, their performance tends to converge, failing to truly mitigate risk.