Future-Proof Portfolios, Ep 375 Michael Nadeau

To manage investment risk, there’s a few strategies we can employ – diversification, where our money’s 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– 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’s often the best places to put your money. There are risks we don’t manage very well in the investment world though, and this is more my opinion here than a mainstream view. I’m concerned about custody risk for example, or the fact that whether it’s our online sharebroker, or even our managed funds, these investments aren’t held directly – they’re held on our behalf. The likelihood of there being an actual problem here is low – perhaps as low as the 1 in 100 year flooding risk we had last summer, yet it’s still something I wonder about – what if everyone tries to cash in their investments all at once, or there’s some other systemic risk we never saw coming. The more links in the chain there are, the less we’re connected to what we own. Read moreSIGN 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 SocialThe Everyday InvestorYouTube InstagramTikTok: @theeverydayinvestorSign up to newsletterwww.nzeverydayinvestor.comAsk me anything!UGRO: For YOUR WealthInstagramYouTubeDarcy UngaroBook a free 15-min chat