Future-Proof Portfolios, Ep 375 Michael Nadeau
b'
To manage investment risk, there\\u2019s a few strategies we can employ \\u2013 diversification, where our money\\u2019s divided up into cash, fixed interest or bonds, property, and shares ensures not all of our eggs are in one basket. If one part does poorly, hopefully another part performs better. Sure you sacrifice some potential gains through concentration, but at least with diversification, your money still has a chance to grow. Increasing our timeframe is another way to manage investment risk\\u2013 property and shares are good examples of how in the short term, you may get great, or terrible returns, but over the longer term it\\u2019s often the best places to put your money.
There are risks we don\\u2019t manage very well in the investment world though, and this is more my opinion here than a mainstream view. I\\u2019m concerned about custody risk for example, or the fact that whether it\\u2019s our online sharebroker, or even our managed funds, these investments aren\\u2019t held directly \\u2013 they\\u2019re held on our behalf. The likelihood of there being an actual problem here is low \\u2013 perhaps as low as the 1 in 100 year flooding risk we had last summer, yet it\\u2019s still something I wonder about \\u2013 what if everyone tries to cash in their investments all at once, or there\\u2019s some other systemic risk we never saw coming. The more links in the chain there are, the less we\\u2019re connected to what we own.
SIGN UP TO THE DEFI REPORT HERE
______________________________________
Check out some online courses!
Sign up to the Home Buyers Blueprint here.
Sign up to the KiwiSaver Millionaire Roadmap: This one\'s free!
Sign up to New Wealth Foundations here: Personal finance from a wealth-builder\'s perspective.
A very big thank you to our past, present, and future sponsors! Thanks especially to Easy Crypto, New Zealand\'s most trusted crypto brand and what Darcy Ungaro uses personally.
Get Social
The Everyday Investor
TikTok: @theeverydayinvestor
UGRO: For YOUR Wealth
Darcy Ungaro