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What is the 80/20 rule? Understanding the economic meaning of the Pareto Principle

1 month ago   |   By Business Insider

The 8/20 rule is also called the Pareto Principle or the "law of the vital few." MoMo Productions/Getty Images
The 80/20 rule finds that 80% of the effects come from 20% of the causes for any given situation.
The 80/20 rule can apply to a range of fields, but is most commonly used in business and economics.
Professionals advise against using the 80/20 rule to guide investing.
If you've ever noticed that a few key players in your portfolio seem to be guiding most of its success, you might have been on to something. This idea is known as the 80/20 rule, which states that 80% of a situation's...
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