Diversification Sounds Great…But Nobody Actually Does It!
10/23/24 • 12 min
Having a well-diversified portfolio is one of the main goals of most investment strategies. Although few would argue with this, the reality is that many investors eventually lose sight of why diversification was implemented in the first place.
This episode illustrates, with vivid examples, how investors might say they want something, but what they actually do completely contradicts their stated desire.
Jeff Harrell also addresses whether there is any scenario in which it makes sense to ignore diversification. And he shares some insider’s knowledge about something financial service firms call “window dressing”... you’ll want to hear this.
If you were under the impression “playing Monday morning quarterback” was reserved for sports and political conversations, think again. You’ll learn just how bad investors are at second-guessing their actions when those decisions don’t work out exactly the way they thought they would.
(Season 2 Episode 2)
Other Episode Referenced:
Podcast produced by Ted Cragg of QuickEditPodcasts.com
Music Credit: Dream Cave / Adventure Awaits / courtesy of www.epidemicsound.com
Having a well-diversified portfolio is one of the main goals of most investment strategies. Although few would argue with this, the reality is that many investors eventually lose sight of why diversification was implemented in the first place.
This episode illustrates, with vivid examples, how investors might say they want something, but what they actually do completely contradicts their stated desire.
Jeff Harrell also addresses whether there is any scenario in which it makes sense to ignore diversification. And he shares some insider’s knowledge about something financial service firms call “window dressing”... you’ll want to hear this.
If you were under the impression “playing Monday morning quarterback” was reserved for sports and political conversations, think again. You’ll learn just how bad investors are at second-guessing their actions when those decisions don’t work out exactly the way they thought they would.
(Season 2 Episode 2)
Other Episode Referenced:
Podcast produced by Ted Cragg of QuickEditPodcasts.com
Music Credit: Dream Cave / Adventure Awaits / courtesy of www.epidemicsound.com
Previous Episode
The More You Know About Investing…The Worse You Do?!?
Obviously, more experienced investors who know a lot about investing and the financial markets must do better than those with limited investing knowledge; right? The empirical evidence is very compelling when it comes to answering this question with a loud and resounding, NO.
Jeff Harell provides research to support why simpler is often better than sophisticated when it comes to investment strategy, as well as a shocking real-life example of how not knowing much about investing can lead to impressive results.
This episode will leave you feeling confident that not only is investing wisely simple and effortless, but extremely rewarding as well.
(Season 2 Episode 1)
Resource Mentioned in Episode:
- Article from The Motley Fool, “Why Long-Term Investors Have a Leg Up on Hedge Funds”
Other Episode Referenced:
Podcast produced by Ted Cragg of QuickEditPodcasts.com
Music Credit: Dream Cave / Adventure Awaits / courtesy of www.epidemicsound.com
Next Episode
Earnings Reports Are Meaningful…Or Meaningless
Quarterly earnings reports announcements are one of the most highly anticipated events in the investing world, so much so that financial news channels even coined the term “earnings season” for when the bulk of companies release their reports.
Although it would seem consequential for investors to follow “earnings season” closely for making well-informed investment decisions, evidence suggests otherwise. Earnings reports are more for show and much less useful than the average investor may think.
Jeff Harrell admits just how silly he finds earnings reports as he shares his first-hand experience and offers some (sarcastic) career advice for those looking to break into the highly lucrative field of analyzing companies for large brokerage houses.
This is one of the shortest episodes in Season 2, but it packs a punch and will leave you with a better understanding of how C-Suite executives at publicly traded companies might game the system. After listening, you can decide for yourself just how much stock you place in earnings reports.
(Season 2 Episode 3)
Resources Mentioned in Episode:
- Seeking Alpha article, “‘Beating Estimates’ - How Companies Win In Earnings Season”
- Investing.com article, “How Companies ‘Beat Estimates’ In Earnings Season”
Podcast produced by Ted Cragg of QuickEditPodcasts.com
Music Credit: Dream Cave / Adventure Awaits / courtesy of www.epidemicsound.com
Invested Poorly: Sad Tales of FInancial Fails - Diversification Sounds Great…But Nobody Actually Does It!
Transcript
Diversification is an investment term that almost everyone is familiar with. It’s pretty much the first topic anyone who gives financial advice will bring up when they start providing specific investment recommendations. Most people nod their heads and agree that owning multiple investments is a good idea. In fact, I never once met with a client who disagreed that some diversification was a good idea when our relationship began. However, as time goes on, this perception often changes. And wh
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