Hey, everyone! If you start diversifying your investments from the get-go, especially if you don't have much money, you could be causing more harm than good to your finances.
In this clip:
- Don't get caught up in diversification
- Focus on understanding your investments
- Invest enough for the percentage of gains to make a difference
Diversifying might seem like a good idea to get exposure, but what it causes is not having enough of one asset for its growth to significantly increase the value of your portfolio. Having thirty assets worth only a couple of dollars will not have the same impact as having one or just a couple of sizable investments.
Get to know your investments, have a small portfolio you know a lot about, do your own research, and feel confident in your choice. Make your buying strategy and follow it.
The size of the investment matters. Even if you can only put a couple of bucks a week into it, focusing on an investment can make it grow big enough to make a difference when its value improves.