There will always be individual investors who through a combination of luck and skill leave with a better return on their investment than the casino owners. But there will also be those who do worse, far worse.
And much like a casino, accepting lots of small investment bets can provide a source of sustained and systematic income that concentrated gamblers can not benefit from.
The complexities of diversification go to show that there are no simple investment decisions.
However, even where an investor has high conviction views on particular markets, the argument that favours diversification are persuasive and it is likely to still play a role.
In cases where an investor has few strong market views, it can form the cornerstone of a strategy that offers more than the sum of its parts.
There is no panacea for determining the correct regional split across equity markets to meet a given set of investment objectives. Stock concentration continues to be ignored by those eulogising about the performance of 60/40 balanced portfolios.
Yet, risk is a multi-faceted problem and has to be analysed in a number of different ways. The key is to do so smartly and not just rely on a simplistic view of past performance to guide future investment decisions.
The investment world has changed a lot over the last few months with the Covid-19 pandemic creating economic upheaval and we are likely to continue to see the effects for years to come.
Over the last few years advisers have been clear to me about what they and their clients want to see in their multi-asset solutions.
Now advisers and in turn, the investment industry will be required to again react to the changing needs of investors in the years to come. It is now up to fund managers to adapt to this and deliver what investors want.
Justin Onuekwesi is head of retail multi-asset funds at LGIM
