Investment Pitfall #4: Failing to Diversify Properly
listen now
About This Episode
What does it mean to properly diversify an investment portfolio? And why is it so hard for many investors to maintain that proper diversification over long periods?
Diversification has become one of those topics everyone talks about, but many investors still aren’t confident that they have good levels of diversification. That’s a big problem since one of the greatest pitfalls of investing is not diversifying properly.
Having a properly diversified portfolio is the best defense against the unexpected events that inevitably affect the financial markets. With the pieces in your portfolio fitting together well, like a puzzle, you significantly reduce your risk.
On this episode, Keith and Marcelo talk about why diversification is important, what proper diversification looks like, common examples of under- and over-diversification, the consequences of not diversifying properly, and more!
Be sure to join us for our next episode where we’re going to introduce the dos and don’ts of financial planning. Thank you for listening!
Key Topics:
- Spotify’s latest milestone (1:35)
- Common investment mistakes (2:41)
- What it means to become an empowered investor (3:11)
- Why diversification is important (4:43)
- How we apply the concept of diversification outside of investing (6:00)
- The evolution of opportunities available to Canadian investors in recent decades (6:58)
- What proper diversification looks like in your investment portfolio (8:26)
- Examples of under-diversified portfolios from the early 2000s (11:27)
- Marcelo’s memorable experience with an under-diversified portfolio (14:16)
- How over-diversification looks in your portfolio (15:48)
- The main problem with over-diversification (16:32)
- Why investors get in trouble with diversification (17:12)
- What is a black swan from an investment perspective? (19:10)
- Why 9/11 is considered a black swan event (20:16)
- Is COVID-19 a black swan event? (21:54)
- The connection between diversification and black swans (22:48)
- The double negative impact of not diversifying properly (23:39)
- A simple way to think about diversification (24:54)
- And much more!
Mentioned in this Episode:
Thanks for Listening!
Be sure to subscribe on Apple, Google, Spotify, or wherever you get your podcasts. And feel free to drop us a line at lawrence@tma-invest.com or 514-695-0096 ext.112
Follow Tulett, Matthews & Associates on social media on LinkedIn, Facebook, and more!
Follow The Empowered Investor on Facebook, LinkedIn, and Instagram
Related Episodes

2022 Tax Tips – With Life Long Expert
Every year more complexity is added to the Canadian tax system, making it difficult for taxpayers to keep up to date. Understanding how to properly file your tax return and take advantage of deductions and credits can put more money back in your pocket.

Investor Beware: How to Protect Your Money from Scams and Fraud
Financial fraud is a serious issue that has unfortunately cost many investors their hard-earned savings. From Ponzi schemes to fake investment opportunities, these scams lure investors in with promises of high returns and low risk.

Building Confidence Through Annual Review Meetings
Effective client meetings are about transparency and empowering investors to move forward confidently and with a clear vision of their financial future.
Stay on top of your financial education
Subcribe and follow to get updates on important wealth management topics.

Connect
Visit Us
3535 St-Charles Blvd.
Suite 703
Kirkland, Quebec
H9H 5B9
Connect
© Copyright 2023 | Tulett, Matthews & Associates Conflict of Interest Disclosure Privacy Policy Legal