In The Warren Buffett Portfolio, written by Robert Hagstrom, he statistically shows that holding a portfolio of 100 stocks gives the investor a mere one-in-nine chance of beating the market over a 10-year period. A spectacular return from any one of these 100 stocks will have a minimal positive impact on the portfolio. After all, a one per cent that doubles in value only adds one percent to overall portfolio value.

At AIC, we believe in the principle of buying only a few excellent businesses that we understand completely, and holding them for the long run. It’s the same approach used by modern-day business owners and successful investors to create their own wealth - people such as Bill Gates of Microsoft, Warren Buffett of Berkshire Hathaway, and Canada’s own Galen Weston of Loblaw.

With concentrated portfolios of less than 25 businesses, the AIC Portfolio Management Team can thoroughly understand the strengths and market power of each. A spectacular return from any one of these 25 businesses will have a greater positive impact on the portfolio.

As the table shows, AIC Funds consistently hold the fewest number of businesses in a Fund than competing funds. As wealth creators we know the value of understanding an investment, and that investment risk comes from not knowing your businesses thoroughly.

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