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Diversified are you really?
| Guest post by: Zirah Daigle |
Article Overview: Many of you may think you are investors as I once thought and maybe many of you are, but most people have a 401k,TSP,ROTH and maybe a brokerage account through your bank or online broker. So, you have a retirement account and maybe you also nvest in mutual funds and stocks. Most people would say you are divesified, I say you are not and I will explain why I think so
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Free Download - Why People Make Important Decisions By Zirah Daigle |
Diversified are you really?
Do you go to your stock broker or do your research online through your bank or brokerage firm? Either way they always talk about diversification,right. Do you know what true diversification is? No worries if you do not know, because most of your brokers and firms don’t either. If they really do know, they willnot tell you.Why,because if theytell you what true diversification is you probably wouldn’t turn all your money over to them.
First of all you have to understand there areapproximately4 different asset classes. A business be it online,brick & mortaror franchise. Real estate as in residential, commercial or maybe raw land. Paper is also an asset class, examples: stocks, ETFs, mutual fund, etc. Finally you have commodities like gold, silver, oil, corn, etc.So, when your broker is telling you to diversify and that he has spread your risk by setting up a well diversified portfolio for you, he has only spread your money over one asset class (paper) and that is not true diversification.
I think, that is why thetrueentrepreneurs like Jim Rogers, Bill Gates and Henry Fordbelieve in focusing not diversifying.If you are investing and do notunderstanddiversification in relation to the asset classes, that my friendis a recipe for disaster. If you’ve made mistakes,good,everyone has,but the minute you try to blame or say, well it’s not my fault my broker told me this,you will have learned nothing from that priceless gem, called a mistake.
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Article Tags: brokerage account, diversified, diversified investment advisors, elizabeth daigle, investors, retirement account, zirah daigle, zirahnliz
Referred by: http://www.mikemorganblog.com
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