MONEY MANAGEMENT: DIVIDE UP YOUR FUNDS WISELY
A Savvy Investing Take: While it’s important to know how to “play” the stock market correctly, it is even more critical to know how much money you should allocate to playing it.
A word to the wise: “Invest” the major portion of your money in a diversified mix of low-risk, high-value, and stable growth and income investments. “Play” with only a minor part of your assets in high-risk, leveraged, or aggressive growth speculations. Don’t make the fatal mistake of playing too loosely in high-risk speculations with the major part of your financial assets.
Managing money effectively requires your personal care and full attention. Don’t neglect or unwisely delegate this key wealth-building function. To casually do so will crack open the door that inevitably leads to disastrous financial results. Choose instead to follow the path of those who built great fortunes by consistently making wise decisions about their own money.
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“True diversification is hard to achieve. The major portfolio building blocks tend to move in the same direction at the same time. That severely limits the protection that diversification affords. Recognize that the building and deployment of cash equivalent reserves is probably your best diversification tool.”
Robert Metz & George Stasen ~Authors of It’s A Sure Thing (1993)