I can't wait for Part 2, but the author should be careful as there is some debate in the literature on this issue. (For example, Chambers & Zdanowicz in the "Limitations of Diversification" paper in the JPM and my article "Volatility Harvesting" in the JWM.) It is true that the expected value of the portfolio is not reduced by volatility, but the expected value is a poor descriptor of the wealth distribution, which is highly skewed. The large outcomes on the upside skew the expected value. Everyone needs to go back and read Chapter 6 "Returns for the long run" by Markowitz in Portfolio Selection (1956). Take uncertainty out of the picture: imagine an investment that oscillates between +30% and -10% return with certainty. Average return = 10%. Growth rate = 8%. Volatility reduces the growth rate, relative to an investment that gave 10% each period with certainty.