There is overwhelming evidence suggesting diversification provides a tremendous “free” benefit for investors. Yet despite the evidence, many investors fail to properly diversify. Whether it be overweighting to their home country, chasing returns, or not even having an investment strategy, too many investors underperform due to succumbing to behavioral biases or ignorance.
In this first of a two-episode series, I’m joined by Mike Philbrick the President, CCO and portfolio manager at ReSolve Asset Management. Mike and his colleagues have written numerous papers on the importance of diversification, and we highlight one in particular in this episode, “Getting Comfortable With Being Uncomfortable”.
Mike takes us through the fundamentals of diversification, arguments for revisiting the importance of diversification going forward, and introduces additional ways to diversify portfolios. We cover a number of strategies and mention some companies–these should not be mistaken for recommendations. This episode is meant to be a conversation, educational, and an exploration into investing in different asset classes to improve diversification, long-term performance, and the overall investor experience. If you are interested in making changes to your portfolio–consult your financial advisor.
Be sure to check back next week for part two of the series where Mike takes us through the portfolio optimization process to build on the principles we discuss in this episode. You’ll also get to find out how he defines wealth in that episode!
I hope you enjoy!
Disclaimer: Nothing on this blog should be considered advice, or recommendations. If you have questions pertaining to your individual situation you should consult your financial advisor. For all of the disclaimers, please see my disclaimer page.