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What is the 80-20 Rule?

June 7, 2021 admin Comments Off on What is the 80-20 Rule?

The 80-20 rule is something many people recognize in their everyday life, but not always consciously. What is the 80-20 rule? Officially known as the Pareto Principle, it’s an aphorism that’s often used to describe the lopsidedness of input-output forces. It’s named after Italian economist Vilfredo Pareto, who, in 1896, observed that 80% of Italy’s wealth belonged to 20% of the population.
Since his original observation, Pareto’s principle has become part of everyday life. For investors specifically, knowledge of the 80-20 rule can help you better-understand your portfolio’s performance. More than that, it’ll help you make smarter investments. Here’s a look …read more […]