How to Diversify Your Investments (Episode 26)

Updated: December 8, 2021

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Summary of Episode 26:

What is diversification? When it comes to investing, this means putting your money on different instruments to minimize your risk. (1:01)

The 5 different ways you can diversify your investments. (2:04)

Is it okay to just invest in mutual funds? (4:30)

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Signs that you are over-diversified. (8:53)

Diversification is a strategy that minimizes risk in our investments. And how we diversify usually also depends on our financial goals. (11:34)

Personal finance is personal. As long as you’re able to reach your destination, or in other words achieve your financial goals in life, then you’ve done a good job at investing. (13:48)

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  1. Thank you very much Fitz, for this superior podcast. I had the thought that wife and I might be concentrating too much on building new business ventures and neglecting our other investment opportunities. Deep soul searching for many hours after listening to and then reading show notes has brought me to the conclusion we are, in fact, on the correct path. While it is a perfect time to develop my wife’s newest business idea, it is the funding issue that comes in at the wrong time. Our three local business operations have zero income at this time, due to the restriction of the COVID-19 crisis. No help from local income sources for us!!! One business will not resume operation until September (and maybe later if the government has to impose additional restrictions) so we have to depend on a reduced budget for now. Existing business operations will NOT be funding our next business development, at least for the next few months.

    It was of great benefit to break down all the parts of the new business and I then realized that it meets all of our criteria, for helping others and producing a nearly bullet-proof (well, virus proof at least) on-line income. The new “biz-child” happens to align closely with a very long term dream of my bride that had never come to fruition. The timing, except for enough development capital is right. The need is out there more than ever and the internet makes it “do-able” up to any scale my wife wants to take it.

    Maybe it is time for me to be a bit more aggressive at night in selling options against my portfolio? Worst case, I get a few positions called away and will have to re-enter on a pullback? There is always the DTS- (Dreaded Tuna-fish Sandwich) as a way to economize!! Fortunately, I enjoy a well made tuna sandwich with a few pepperoncini on the side! I am, above all, glad to have reached a positive decision. Together, Bride and I will make a way and forge ahead! Again, thank you for this great broadcast and post Fitz.

  2. Good day Sir! I just finished reading Rich Dad Poor Dad Cashflow Quadrant by Robert T. Kiyosaki and he mentioned their that when investing one of the things you shouldn’t do is to diversify/ diversification . What can you say about this sir?

  3. @Shyra
    I prefer to diversify because it has helped me minimize losses and manage my risk in my own investing experience. Each person has an investing strategy that fits them. For Kiyosaki, diversification is bad. What’s important is to understand the reason why Kiyosaki believes this, and if his reasons also apply to you. There’s no one correct way to invest. Personal finance is personal. So find the investing strategy that works for you according to your situation, financial goals, and resources.

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