Core Insights - Portfolio diversification is often seen as a method to grow wealth while reducing risk, but excessive diversification can lead to diminished long-term returns, a phenomenon referred to as "diworsification" by investor Peter Lynch [1] Group 1: Wealth Management and Investment Performance - A Reddit user shared their experience with a wealth management firm that managed their family's investments, expressing dissatisfaction with the firm's diverse portfolio spread across various market caps and international funds [2][3] - The Redditor noted that none of the funds managed by the wealth management firm outperformed the S&P 500, a widely recognized benchmark for high long-term returns [3][4] - The Redditor suggested that consolidating investments into an S&P 500 ETF would simplify their investment strategy and potentially yield better returns [4] Group 2: Market Benchmarking - The S&P 500 is highlighted as a well-diversified benchmark that has consistently outperformed the funds offered by the wealth management firm [4] - The S&P 500 includes 500 of the largest U.S. corporations and regularly updates its composition to replace underperforming companies with more successful ones [4] - A commenter reflected on their own experience, stating that after several years of investing, they found the S&P 500 challenging to outperform over time [5]