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Some Lessons In Diversification

July 16, 2018

Morningstar recently used its database to show how a series of three-fund diversified portfolios would have performed over the last 20 years. The idea was to use the three-fund portfolio idea to simplify investing and show how investors could improve their diversification. One point to keep in mind is that the last 20 years was […]

Advice From Harry Markowitz on Investment Diversification

July 13, 2018

Markowitz was a Nobel Prize winner in Economic Science and is credited with establishing the foundation of modern portfolio management. This article reminds us of Markowitz’s advice for every investor: “Diversify,” Nobel-Prize winner Harry Markowitz once responded when asked how investors should approach the stock market. “And if I had to offer a second piece […]

True Investment Diversification in Detail

February 20, 2018

I’ve said many times that people believe they have diversified portfolios when they really don’t. Here’s a good explanation of what true diversification is and its benefits. It explains how diversification can result in higher long-term returns and also less risk in the portfolio, with risk being measured as the variability of returns. When we […]

Jay Leno’s Wealthbuilding Diversification Strategy

March 17, 2017

Most people have heard about diversifying their investments. Few have heard about diversifying their income sources. This article explains that Jay Leno and many others always tried to have more than one source of income and would save a lot of their income. Anyone can employ this strategy — it all starts with creating at […]

The Benefits of Stock Market Diversification

August 4, 2016

We counsel diversification and balance at Retirement Watch. It’s hard to forecast markets consistently, and it’s risky to make a bet and be wrong. Here’s a profile of a mutual fund that practices real diversification, not the pseudo-diversification of most “balanced” mutual funds. Read to learn how balance works over the long run and why […]

Diversification, De-Risking and Other Thoughts

April 6, 2015

Investors are very nervous about owning stocks these days, but they also don’t want to miss out on a continuation of the bull market. If that describes you, and you’re not sure what to do, consider this article. It’s written primarily for institutional investors (pension funds and such) and might seem to ramble a bit. […]

Is Your Investment Portfolio Really Diversified?

November 12, 2013

In recent years a number of investors realized they weren’t really diversified with a traditional stock and bond portfolio. So, they started to add other assets and strategies. But once the Fed started manipulating markets with quantitative easing, the diversification of many of these investments disappeared. Morningstar recently revisited some of the more popular diversifiers […]

Misinformation on Investment Diversification

October 11, 2013

Most investors believe they are diversified. They are told to diversify by the financial services industry. I’ve argued for many years that the traditional diversification peddled by the financial services industry isn’t real diversification, putting investors at more risk than they believe they are taking. From time to time Wall Street admits that people really […]

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