This Investing Mistake Cuts Returns in Half
The Money with Katie Show
00:00
How to Build a Portfolio in a Downturn
Investing in a diversified mix of index ETFs as opposed to just one or a sampling ofETFs that have near perfect correlation will also help buoy your portfolio in down times. For example, when tech stocks got crushed, so like think Facebook dropping at 26% in a single day in February 2022 after a report earnings report, it disproportionately impacts those large cap growth funds which lean heavily on the tech sector. If you only own S&P 500 plus cap weighted total stock market funds and large cap starts getting pounded, you are likely going to feel more compelled during the downturn to diversify or sell than someone who is already diversified.
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