Posts Tagged ‘stock market indexing’

Whatever Happened to Diversification?

Posted March 4, 2009 by Bernz

Every investor has heard the advice to diversify their portfolio holdings in order to reduce risk and increase income. It is the gospel of every television financial guru and appears in every brokerage newsletter.

diversification

But how many people actually know what it means and practice it on a regular basis? Diversification is nothing more than a variation of the old “don’t put your eggs in one basket” mantra that has served people well from the Great Depression until today. Spreading out your investments amongst different industries, securities types and company size protects you from an economic downturn in any one segment of the market.

While diversification makes logical sense, many small investors choose to ignore the safe route and try to make fast money in the markets. It’s easy to see why people choose this path. Every late night “you too can make a million next year with tax notes” charlatan encourages you to forget about boring bonds and blue chip stocks and get on the train to riches. After all, Joe from New Jersey made $120,000 last month by spending five minutes a day picking stocks. (more…)


Posted in Financial Education, Investing Strategies, Stock Market Investing | No Comments »

With total stock market indexing your investment goes a long way

Posted October 13, 2008 by Bernz

Want an easy investment approach? By easy I mean the cut-to-the-chase, one-stop-shopping approach, where you get a heavy mix of all stock styles and size categories.

I’m referring to total stock market indexing. It’s a single-product approach to investing that allows you to invest in the entire stock market all at once. If owning a sizeable chunk of the market and having the opportunity to achieve long-term sustainability excite you then you’ll also appreciate these other 4 advantages of total stock market indexing give you right from the start.

  1. Effortless and broad diversification. This helps protect your portfolio from risks because your “investment eggs” are placed in more than one basket.
  2. You save time. The simplistic structure eliminates monitoring and managing complex portfolios that contain many stocks from various sectors. You get a clear, understandable view of your portfolio at any time.

    3. (more…)

Posted in Retirement Planning, Stock Market Investing, Stock Watch | No Comments »


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