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What is the Meaning of Diversification?

jacobted blog, Financial Planning Leave a Comment

While the question is simple, the answer is not. Below I have listed several factors where diversification plays a role in reducing risk in an investment portfolio. Asset allocation Most people think of asset allocation when considering if their portfolio is properly diversified. We allocate our monies across the following three (3) asset classes: equities, fixed income, and cash. The decision to include an asset class is based upon their historical correlation with other asset classes. Correlation measures the strength of the relationship between two asset classes, where the value can range from +1 (perfectly correlated) to 0 (no relationship) …

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VIDEO: Goals and Dreams Are Powerful Motivators

jacobted Behavioral Finance, blog, Financial Planning, Your Loved One Has An Addiction Leave a Comment

Recovery teaches us “take one day at a time”. When we introduce goals and dreams into the conversation, we not only convey belief that long-term recovery will happen, we replace emotional purchases with purposeful spending.