| Back during the dot-com boom, the stock market became the national pastime. Financial journalists like Maria Bartiromo became celebrities, appearing on late-night talk shows. All anyone could talk about was stocks, stocks, stocks. And it pretty much stayed that way over the next 25 years. It makes sense when you think about it. Stocks can make big moves in short periods of time, which makes for great media stories. You won't see any headlines about how a bond matured today and paid investors the par value as agreed upon or how it's the first of the month and landlords collected their rent. But those things, along with precious metals, are important for a portfolio. Every so often, the stock market reminds us of that, as it did earlier this year. Bond investors weren't affected by the S&P 500's 12% drop in a week back in April. No matter what happens with stocks, bond investors will almost certainly get their money back at maturity, as bonds have an extremely low default rate. Similarly, a real estate investor will get paid the rent that is due or dividends from their real estate investment trust regardless of whether the market tanks 1,000 points or 5,000 points. I'm a stock guy. I love investing in and writing about stocks. Investing in stocks has been lucrative for me over the years. But I'm not as young as I once was, so I need to start reducing my risk here and there. There are no guarantees on Wall Street, which is why owning other assets most definitely helps me sleep at night. They continue to perform and do what they were designed to do whether stocks are surging or collapsing. If your portfolio is too heavily weighted in stocks, strongly consider diversifying into other assets. Good investing, Marc P.S. What are your best stories or tips about investing? Feel free to share them in the comments. You never know how your experience could help someone else! |
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