Diversification Implications:
The contrasting performances of ASML and
TSMC demonstrate the benefits of diversification. While ASML faced setbacks,
TSMC thrived, showing that different companies in the same sector can experience varying outcomes based on their specific business models, exposure to trends like Al, and financial outlooks. Diversifying across companies or sectors can help mitigate risks, as poor performance in one investment (like ASML) can be offset by gains in another (like TSMC). This approach can smooth out overall returns and provide stability in uncertain markets.