Chris explains investing diversification with some analogous side trips to the worlds of food and nature. He starts by illustrating the importance of perspective, emphasizing the need for many decades of data in backtesting. Next, he covers the ingredients, or asset classes and styles, most investors will use to diversify.
With the ingredients in hand, he explains what happens when we mix them, and how mixing ingredients that are substantially different can improve the return we get for any given level of risk.
He then covers the real-world implications for accumulators and retirees and finishes off with some fine tuning tables and thoughts on the discipline needed to be a meaningfully-diversified investor.
The Merriman Financial Education Foundation is a registered 501(c)(3) organization founded in 2012.
All donations are used to support our work. Deductions are permissible to the extent of the law.
Contact us at info@paulmerriman.com
All information on this site is provided free of charge (with the exception of books for sale) and is funded in full by The Merriman Financial Education Foundation.
Anyone wishing to use this educational information in web-based or printed materials are welcome to do so with the following attribution and link:
“This information freely provided courtesy of PaulMerriman.com.” We would also appreciate a copy and link of where it has been published via email.
All Rights Reserved