Salient to Investors:

Never put too much of your portfolio in a few investments, or in one country or industry. The employee with a significant chunk of his 401(k) in his employer’s stock, or gets his contribution matched in company stock, risks both job and  retirement plans if a setback for the company threatens.

Never put too much faith in an emerging market. Canada was the Brazil or China of its day; growing at an average of 6.7 percent per year from 1896 to 1912, and more than 10 percent in 1905 and 1906, even after inflation.

The IMF says emerging markets will grow 5.6 percent in 2013, while Morningstar says emerging market mutual funds attracted $26.2 billion over the past year, far more than any other equity fund category. The MSCI Frontier Markets Index is up 8.5 percent in 2013, 9 times more than the broader emerging-market index.

Jeremy Grantham at GMO says the problem with growth companies and growth countries is that they so often outrun the capital with which to grow and must raise more capital.

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