The History of Business - Why Diversify a Portfolio

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The idea behind indexing is you essentially own the whole market. The gains on thee companies that do well will more than offset those many more that give mediocre or even poor returns. And so since you can't know in advance which ones will prosper and by how much, which will be the best reforming stocks,.

In this special episode of the show Shermer and Green discuss one of the most important and yet poorly understood concepts in modern society: money and why it matters. They discuss: the origins of money, and how to make it work for you, how the stock market works, the power of compound interest, the secrets of millionaires, the difference between a IRA, 401(k), and a Roth IRA, hedge-fund managers and investment advisors, the relationship between risk and reward, the relationship between saving and spending, the problem with free market capitalism, money, happiness, and meaning, and the role of luck and contingency in how lives turn out.