My Personal Investing Playbook: Extreme Security, Extreme Risk, Extraordinary Returns (#67)
The Kevin Rose Show
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Strategic Diversification: Buckets for Financial Success
A well-rounded investment strategy includes a diversified approach with multiple asset buckets. Allocate 50 to 70% of the portfolio to index funds, particularly those with low expense ratios, to ensure long-term stability and broad diversification. Utilize bonds mainly as a hedge against short-term inflation, treating them as liquid assets, and convert them into equities or favored stocks during market drawdowns of 20% or more. Dedicate 15 to 20% of the portfolio to high-risk investments for potential outsized returns, such as angel investing, venture capital, or individual stock picking. Finally, maintain a small allocation of 4 to 5% for catastrophic downside protection, often represented by gold or similar safe-haven assets.
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