Diversifying Your Assets
“Never put all your eggs in one basket.” That’s old school wisdom; I’m not preaching anything new here. But that’s definitely something that you want to consider when you’re investing as well. Diversification is so important.
Now, diversifying just means you want to own a whole bunch of different assets. If you’re looking at someone’s whole life you’re talking about real estate, investment in businesses, loaning through bonds; all sorts of different options. You want to make sure that you own all sorts of different assets if you want to protect yourself from the failure of any one of those assets.
It’s very important to understand though, that by diversifying your portfolio that doesn’t mean that you’re going to get better returns, or that you’re going to see more profit. You might actually see less; but you also can’t get wiped out necessarily if you own a whole bunch of different kinds of assets.
It also makes it far easier to get through difficult times when any one of those assets may be down but another asset may be up. So, diversification isn’t just good for protecting your assets, it’s also good mentally for when things are tough out there for one particular asset that you might own.
The key point here is that diversification is something we take seriously. It’s a running thread through everything we do here at my practice - and it’s important for you to look at too.
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