Looking for the next big investment that will grow your money quickly? If so…you may be better off looking for a unicorn. There are many get rich quick schemes that offer promises of big returns, but are they legit? If you do any research, you will learn that the most secure way to grow your money is to consistently invest, over time, in a diverse portfolio. Sure, some people get lucky with a single stock or investing in real estate that becomes super valuable for one reason or another, but that type of luck is not in the card for most of us. When you are choosing where to invest your money, or you sit down with a certified financial planner – talk about diversification. Craft a diverse portfolio that suits your risk tolerance and gets you to your financial goal. Never put all your eggs in one basket, no matter how pretty the basket is!
If you need a financial coach to help you organize your finances, email me at I also do speaking engagements on personal finance.
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I am a financial coach that focuses on improving personal finance behavior. I do not sell investment products or manage investments.
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Is all of your money in a single Investment whether that’s stock or a Piece of real estate You might be putting your portfolio at [Music] Risk [Music] What’s up everyone thank you for Stopping by the achieve financial Coaching channel where we believe in Breaking the chains of debt And talking about all things related to Personal finance my name is kenny simon I am your personal finance coach And today i want to talk to you about Putting your eggs all Into one basket basically talking about Diversification And the importance of diversification When you are investing in anything You really don’t want to put all of your Money into a single investment no matter How many of your friends tell you This is the new hot thing put your money Here it’s going To the moon right so we want to make Sure that We stay steady slow and steady Consistent over time With a diverse portfolio usually lets You win In the long run and so i want to make Sure that i just give you some food for Thought
So that you make sure your portfolio is Diverse enough Please like the video subscribe to the Channel drop a comment and share it with Some friends Let’s get started so let’s start today’s Video off with a couple of definitions i Haven’t done that in a while Diversification is the first one Diversification is a risk Management strategy that mixes a wide Variety of investments within a Portfolio So it’s actually a risk management Strategy a way to reduce your risk we’ll Talk about that today of course And then asset class maybe a word that You don’t hear quite Often but it is a grouping of Investments that exhibit similar Characteristics and are subject to the Same laws and regulations So when you think asset class think Stocks think bonds Cash maybe commodities gold silver those Things and maybe even real estate A good stock market based portfolio will Have at least Two or three of these different asset Classes and then finally a quote that i Love Listen even the bible is getting in on This diversification thing So if you look in ecclesiastes chapter
11 verse 2 it says But divide your investments among many Places for you do not Know what risks might lie ahead so Why shouldn’t i put all my eggs in this One Amazingly perfect investment that my Buddy told me about Well i have two basic reasons and then We’ll talk a little bit of Detail just a little bit here but reason Number one is Putting your money in a single Investment is just way too risky There is that’s just too much exposure To any single company Or investment and i just feel like that Can be disastrous Because if that fund or the investment Crashes bye bye money The second reason is diversification Improves the odds of a better return Over an extended amount of time that has Proven true for me and for many Others and so in general you want to be Thinking that If i diversify it will yield a higher Return Over time if you believe in Diversification well how do you spread Your risk Glad you asked so the first thing i Think about in general Is just variety you want to have a
Variety of Of investments and if you’re if we’re Talking about the stock market For you know for purposes of this video Think Companies that are in multiple Industries Various sizes even locations some may be In the u.s some may be In europe some may be in asia so think Multiple industries different sizes Different locations different Products and even if they sell a similar Product maybe they have a different Strategy Or they target a different market group But variety is definitely What you want and um and then consider Bonds Um if you don’t know much about them Research them a little bit but consider Bonds to balance out any stock or equity That you have in Your portfolio um definitely sort of Helps to make it not so aggressive And then i think easy button right and So the way i’ve done my personal Investing is i think Mutual funds and exchange traded funds So these actually come with a certain Level of diversification already But you still want to research to make Sure that you’re choosing something that Meets your qualifications right because
Some are heavy in one particular Sector or another even though they may Have uh many companies in the same fund Like i have one that’s a Tech mutual fund or exchange traded fund Rather so it invests heavy in tech but It’s different size companies within That fund and then when you’re thinking About um You know picking a mutual fund or Exchange traded fund Think index funds something that just Mimics one of the indexes the s p 500 Or it could be one that mimics the total Stock market but that is very Easy um diversification and Pretty good bet in terms of um how you Want to invest your money if you’re in It for the long run And then if you’re thinking retirement Think target funds Um very easy if you don’t know to just Sort of pick one you know if you’re not Going to retire You know until 2050 they have funds but Fidelity Vanguard they all have funds that you Can just pick that’s a target date 2050. And so that really helps you to start Diversifying Um in your retirement account while you Learn a little bit more about what you Really want to invest in If you’re still on the fence about how
You spread your risk or why I’m spreading your risk out is important When you’re investing hey you can always Go ahead and do the all eggs in one Basket it is your choice based on your Risk tolerance That is a little bit uh too risky for me I just don’t want to take a chance on a Single stock But if you are the type of person that Likes to hand pick stock just Um look try to mimic a mutual fund in Terms of how it’s diverse Pick stocks from various industries and Sizes etc But don’t pick literally one stock Because you’d like that particular Company And just dump all of your money into That you know like picking amazon and Just pouring all of your money into Amazon You don’t know what could happen with The leadership you don’t know what could Happen in terms of scandal or something That makes that stock crash and then There goes your money So let’s stick to trying to spread our Risks out So i hope that was enough information Just to give you some food for thought Okay this is not investment advice but It is Just some things that you need to think
About before you invest Right just enough information to make You think about how diverse your Portfolio is maybe how you should Um invest once you start getting into The market or if you’re already into the Market these are things you should talk To your certified financial planner About Um as you’re investing your hard earned Dollars right Just enough information to make you Think about what you are doing With your money we want to be smart with It we work hard for it i want my money Working hard for me As it grows over time and i do believe That having a highly diversified Portfolio gives us the best shot over Time at doing that Listen do your research before you Invest in anything even if you Are investing with a professional Morningstar The other brokerage houses like vanguard And fidelity They offer lots of information on very Specific mutual funds and exchange Traded funds they give them ratings There’s just a lot of information out There Go to investopedia and start looking up Information About you know basic financial terms it
Is not nearly as complicated as you Think But the bottom line in today’s video is Don’t put all your eggs in one basket Really think about diversifying your Portfolio i have a very diverse Portfolio i only invest in Exchange traded funds and mutual funds And part of my retirement is actually in A target fund so all the things that i Talk to you about Are things that i follow myself and over Time it has really paid off Well for me remember this you can Achieve greater things than where you Are today if you’re willing to put into Work Conceive it believe it and achieve it I’ll see you on the next video if you Liked today’s video please consider Subscribing to the channel Dropping a comment and hitting that like Button check out some of the other Videos i’ve created as well See you next time
