In practice, I have found many people think they are diversified looking at the surface, but come to find out their investments have very little to no diversification. In this episode, I discuss the benefits of diversifying your investment portfolio and the common myths around diversification.

More specifically, I discuss:

• What does it mean to be truly diversified?
• What can diversification do for you?
• What should you expect by diversifying appropriately?
• Common, real-world examples of “pseudo diversification”
• What not to do when trying to diversify your investments, and alternative approaches
• Why alternative investments don’t belong in a retiree’s investment portfolio

Resources mentioned, which you can get at http://retiredishpodcast.com/23:

• Retired-ish Newsletter Sign-Up
• Free 4-Step Retirement Analysis for Ages 50+
• Ask Cameron A Question!

 

Key moments in this episode are:


00:02:10 - Importance of Diversification


00:04:02 - Benefits of Diversification


00:07:57 - Understanding Diversification


00:10:22 - Example of Poor Diversification


00:16:01 - The Importance of Choosing Cheaper Investments


00:17:48 - The Pitfalls of Alternative Investments


00:19:29 - The Role of Stocks in a Portfolio


00:21:33 - The Risk of Corporate Bonds


00:23:56 - The Importance of International Diversification


00:32:16 - International Stocks Underperforming the US


00:32:37 - Importance of Financial Planning


00:33:14 - Power of a Financial Plan


00:33:58 - Dangers of Abandoning Investments


00:34:31 - Future Episodes on Diversification