MONEY Master the Game by Tony Robbins

Author:Tony Robbins
Language: eng
Format: epub
Publisher: Simon & Schuster

IT’S TIME TO GET IN THE GAME

Okay, now you know the players that belong in your allocation buckets, and you know the key to building a winning team: diversify, diversify, diversify! But there’s more. You not only have to diversify between your Security and your Risk/Growth Buckets, but within them as well. As Burton Malkiel shared with me, you should “diversify across securities, across asset classes, across markets—and across time.” That’s how you truly get a portfolio for all seasons! For example, he says you want to invest not only in both stocks and bonds but also in different types of stocks and bonds, many of them from different markets in different parts of the world. (We’ll talk about diversifying across time in chapter 4.4, “Timing Is Everything?”)

And, most experts agree, the ultimate diversification tool for individual investors is the low-fee index fund, which gives you the broadest exposure to the largest numbers of securities for the lowest cost. “The best way to diversify is to own the index, because you don’t have to pay all these fees,” David Swensen told me. “And you get tax efficiency.” Meaning that if you’re investing outside of your IRA- or 401(k)-type account, you don’t get taxed for all that constant buying and selling that goes on in most mutual funds.

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