emotionalOver the last couple of years, volatility has really become the norm. And it’s gut-check time, it’s a shakeup, it’s an opportunity to check your emotions at the door and change the way you invest. If you’ve been feeling emotional lately (and you’re not alone), it’s an opportunity to drop it. If a swing of a few hundred points in a day is getting to you, then consider doing and thinking about things differently. If you’ve lost your perspective, or perhaps you never even had one, it’s an opportunity to regain it, or formulate one now, finally. And be honest in doing so, above all. Where are your one-sided stock picks and investment choices today? Where are your risky bets on marijuana stocks sitting right now? You have an opportunity right now to stop gambling and embrace passive investing.Continue reading

Ranakpur Jain Marble Temple Pillars Frescoes

By Acred99 (Own work) [CC BY-SA 3.0 or GFDL], via Wikimedia Commons

You want to invest, and you figure the way to do it is to (somehow) pick the best stock out there and load up. What’s the best stock out there? Right now, some people will tell you it’s Apple, some people will tell you it’s some small company in the marijuana industry, some people will tell you it’s Berkshire Hathaway, and they’ll all have their reasons why. For the sake of our discussion, it doesn’t really matter what that one stock is, let’s just pretend that you have picked your one stock and you’re going to put your money into that stock because you believe your money will be best put to use there. After all, what’s the point of diversification if you’ve picked the best stock out there? It’ll only dampen your returns, right? Well, besides the reality that you can’t predict the future, there are a host of threats your investment continuously faces. Through diversification, you can hedge your risk of investing in that one equity high-flier. Utilizing broad-based, poorly correlated assets in a well-balanced lazy portfolio minimizes your risk to each individual stock, protecting you from the possibility of an outright loss. And rest assured, there’s an immense amount of risk out there to mitigate. Continue reading