Diversified Portfolios - Brilliance and Limitations

This is something we can tell you for certain. The returns in broadly diversified allocations will continue to change in unpredictable ways, and if you, I, or anyone else could predict the future, then diversification would be unnecessary. In this video John shows you both the brilliance and limitations of a diversified portfolio. 
 
Get the answers to these important questions in this video: 
1. Will a prudent diversified portfolio ever be the best performing portfolio in any given year? 
2. Will a prudent diversified portfolio ever be the worst performing portfolio in any given year? 
3. Is there any way to tell, IN ADVANCE, what the best preforming asset class will be next year? 

Because of all the empty promises and wish fulfillment from the financial industry prognosticators, gurus, and con men, staying diversified is not easy, but to be successful long term, it is extremely important. You don't need to be in the best performing portfolio every year to have a successful investing experience. In fact, studies have shown, while anyone can get lucky, investors that chase hot recent performance, often underperform prudent, diversified, disciplined investors over long periods of time. 

Feel free to share this important video to family and friends. 

Invest intelligently! 
John Borger and Scott Buchanan 


 

What Happens When Investors Start Gambling on Individual Stocks?

When investors start gambling on individual stocks and actively trade, all logic and reasoning go out the window. Especially if the first one or two trades is a big winner. "That was easy!" The same goes for advisors, brokers, and money managers. They also get sucked into similar over confidence in their abilities. They confuse luck with skill. 

"But John...they/I have done the research."

There is a problem with research. It is all current public information, and if it's not, it is illegal. The public information today is already in the price today. Only new information changes prices, and new information is unknowable. We can guess about future information, but it is only a guess. 

I have coached investors many times, and let them know, not even the CEO of a company knows what is going to happen to his own company. As such, imagine the difficulty for analysts, or stock pickers, or fund managers. 

When you trade in individual stocks, you add all kinds of unknown risks. There are some stocks that never recover. A prudent broadly diversified portfolio has always recovered and gone on to new highs. 

One really bad trade can ruin a lifetime of prudent returns. 

Feel free to share this important video to family and friends. 

Invest intelligently! 
John Borger and Scott Buchanan


 

Portfolios & Expectations 03/19/16 Part 3 of 4

In Part 3 of 4 you will learn:
- What it means to be diversified. Diversify is rule #1.
- If anyone could predict the future, we would not need to diversify.
- Why no one can reliably forecast the future. All forecasts include assumptions.
- Dr. R. Lyman Ott discusses why we need to diversify.
- Guru Jim Cramer on diversification.
- What is correlation of asset classes and why is it important?
- One more reason to diversify: Negative returns are disproportionally more damaging than positive returns of the same size. We do the math for you.
- Why investors forsake diversification - Greed and hubris.
- Why investors forsake diversification - Investors forget about or ignore risk.
- If you want to increase your potential returns, what should you do?
- The brilliance of diversification.
- Asset class performance will be different every year and it cannot be determined in advance.

Feel free to share this important video to family and friends.

Invest intelligently!
John Borger & Scott Buchanan


 

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