Joe Saul-Sehy – Financial Risk Management Lies in Diversification across Industries

Joe Saul-Sehy is the co-host of the award-winning Stacking Benjamins podcast, which focuses on earning, saving, and spending with a plan. Joe is a former financial advisor (16 years) and represented American Express and Ameriprise in the media. He was the “Money Man” at Detroit television WXYZ-TV, appearing twice weekly. He’s appeared in Bride, Best Life, and Child magazines, the Los Angeles Times, Chicago Sun-Times, Detroit News and Baltimore Sun newspapers. He’s also appeared online in more than 200 different places, including CNBC.com and WSJ.com.   “If you think you’re smart enough to know where the market is, you don't understand the risk of investing.” Joe Saul-Sehy   Worst investment ever A walk into Best Buy leads to buying a stock Joe has always been the guy who loves experimenting with different investment philosophies and investment strategies. He has also been a forward thinker in technology, and that’s what led him to his worst investment ever. One day he walked into a Best Buy and saw this miracle called XM Radio and thought it was the coolest thing he’d ever seen. This satellite radio had hundreds of channels, and he could now listen to all his favorite sports, business news, comedy, and much more, all in one place. That was phenomenal! He thought to himself that this was the future, and it was going to be amazing. But, being the financial risk guru he is, he didn’t buy the satellite radio that day. It took him a good nine or ten months of research as he considered if he needed it and if a subscription for his radio was necessary. Buying the company because you love the product So he did all kinds of research. He finally bought one, and he loved it. He loved the radio so much that he bought 1,000 XM stocks for $2.85 each. That’s how much he loved the product! XM satellite radio was indeed a great product, and the shares rose up to $30 a share. XM was doing phenomenally well, and Joe couldn’t help pat himself on the back for being such a smart investor. Investing in the competition is a BAD idea He decided it was time to diversify his portfolio, so he sold half of his XM shares at $30.25 making some pretty good profit. He found XM’s competitor Sirius Satellite Radio and invested in it with the money that he took out of XM. He figured that since XM was doing so well, the competition would perform as well. While he...