While diversification is often considered a golden strategy, it can also be a headwind under certain circumstances. Just take a look at Amazon.com Inc (NASDAQ: AMZN) as a clear example. As a technology juggernaut, Amazon is clearly a player in the push for the digitalization of everything. However, AMZN stock is only up around half-a-percent this year. You can blame the tough environment in retail. Still, the security may offer a compelling look for aggressive speculators.
On surface level, the fundamentals don't appear conducive for AMZN stock. Earlier in the week, Oxford Economics lead analyst John Canavan stated that while he's cautiously optimistic about the U.S. economy, the market could be excessively ambitious regarding the dovishness of the Federal Reserve. Per Canavan, the benchmark interest rate might be cut only one more time this year, not two.
