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To Diversify or Not diversify, that is the question...
11-14-2020, 08:31 PM
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#1
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Recycles dryer sheets
Join Date: Feb 2020
Location: Danville
Posts: 167
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To Diversify or Not diversify, that is the question...
I diversify passively through retirement accounts-- 401ks and an IRA. I invest actively through my individual stock account and I diversify within in it very little. I find that this works for me. I'm not asking for anyone's advice here, (so many people seem to assume so much). The title of the post merely is intended to share how you choose to diversify or not in your world. I enjoy hearing how others handle their affairs.
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11-14-2020, 08:49 PM
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#2
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Thinks s/he gets paid by the post
Join Date: Sep 2013
Location: Cincinnati, OH
Posts: 4,373
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I hold wide diversified funds. My only deviation is some sector type funds that are a little more specific than the broad market type.
When working I did have company stock, however that was all swapped to the diversified funds once left company.
__________________
The problem isn't artificial intelligence, it's natural stupidity.
You can't spend yourself to prosperity.
Semi-Retired 7/1/16: working part-time (60%) for now [4/24/17 changed to 80%]
Retired Aug 2, 2017; age 53
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11-14-2020, 09:05 PM
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#3
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Thinks s/he gets paid by the post
Join Date: Apr 2012
Location: Nashville
Posts: 2,506
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I/we diversify per a 60/40 equity/debt-cash plan, with equities increasing slowly as we age. In our Roths, however, we are 100% equity.
__________________
OMY * 3 2ish Done 7.28.17
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11-15-2020, 01:41 AM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Location: Leeward Oahu
Posts: 17,915
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I Diversify, but YMMV.
__________________
Ko'olau's Law -
Anything which can be used can be misused. Anything which can be misused will be.
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11-15-2020, 02:28 AM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,145
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We hold broadly diversified mutual funds in all accounts. We have exposure to small and mid cap funds as well as international and large cap. We gave up specialty sectors like REITs not long ago. We hold around 50/50 stock funds and fixed income funds so we are diversified that way too. Fixed income is diversified across cash, short-term and intermediate duration funds. Broad diversification was always a goal since building the retirement portfolio. Before retiring we were highly concentrated in company stock.
__________________
Retired since summer 1999.
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11-15-2020, 03:00 AM
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#6
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Thinks s/he gets paid by the post
Join Date: Oct 2014
Posts: 1,544
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Here is Blue531 again. Starts a thread and doesn't post again on that thread. A few days later starts another thread and again doesn't post again on that thread. Very strange.
__________________
-Big Dawg-FI since 9/2010. Failed ER in 2015. 2/15/2023=DONE! "Blow that dough"-Robbie
" People say I'm lazy, dreaming my life away Well, they give me all kinds of advice designed to enlighten me When I tell them that I'm doing fine watching shadows on the wall "Don't you miss the big time, boy. You're no longer on the ball" -John Lennon-
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11-15-2020, 03:16 AM
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#7
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Recycles dryer sheets
Join Date: Sep 2016
Posts: 342
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I diversify passively in my tax advantaged retirement account, through board based index funds. I actively diversify in after tax accounts, mainly with individual stocks. But I am closer to a buy-and-forget investor than a trader. I may slowly convert my active positions into passive indexes over the next decade, but I enjoy having some active engagement.
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11-15-2020, 05:58 AM
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#8
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Recycles dryer sheets
Join Date: Jul 2013
Posts: 385
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We have diversified by holding individual stocks, individual muni bonds, investment real estate and cash (CDs, money market etc...) in approximately equal proportions of 25%.
Because interest rates are so low, the muni bond portion of our portfolio has decreased (through calls or maturity) in the past few years and the funds have been transferred to individual stocks and real estate. The decrease in rates has made it impossible to replace the bonds at an acceptable interest rate but has resulted in an increase in the value of the real estate.
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11-15-2020, 06:19 AM
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#9
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2008
Location: On a hill in the Pine Barrens
Posts: 9,720
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Quote:
Originally Posted by Blue531
I diversify passively through retirement accounts-- 401ks and an IRA. I invest actively through my individual stock account and I diversify within in it very little. I find that this works for me. I'm not asking for anyone's advice here, (so many people seem to assume so much). The title of the post merely is intended to share how you choose to diversify or not in your world. I enjoy hearing how others handle their affairs.
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Our approach is similar to yours.
1) Retirement accounts (85%) hold passive index funds only.
2) Taxable brokerage (15%) is amorphous group of stocks, ETFs and funds.
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11-15-2020, 06:38 AM
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#10
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Thinks s/he gets paid by the post
Join Date: May 2016
Location: Mid-Atlantic
Posts: 2,676
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I tried to do something similar, Blue531, at least I think my thinking and motivation was similar; our retirement accounts are a handful of mutual funds with a target AA where we set it and forget it, but then I inherited a small IRA and decided to buy some individual stocks in an industry that I tend to read a lot about (tech), and eventually cryptocurrencies. I call it the "fun money" approach, and the main benefit of this approach has been to remind me to stick to passive investing.
(My individual stocks that I've bought and held for over 10 years have done well, but everything else has been an object lesson. Even the stocks, I now wish I held in a taxable account instead of an inherited IRA, but I may fix that this year or next by simply "swapping" a couple of positions between accounts.)
__________________
-Looking to FIRE in the mid-2020s, which would be our mid-50s.
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11-15-2020, 06:47 AM
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#11
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Posts: 5,350
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I lost around 1/3 of my net worth recently due to investing too much in a single stock. From now on the least diversified I will get is the S&P 500 index fund
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11-15-2020, 07:39 AM
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#12
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Recycles dryer sheets
Join Date: May 2019
Posts: 318
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We are invested in equities, short term bond funds, cash, and real estate. The real estate is a nice diversification as it pays a quarterly cash dividend.
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11-15-2020, 09:08 AM
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#13
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2018
Location: Tampa
Posts: 11,298
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Hey Blue531
How are you diversified on your side for comparison?
__________________
TGIM
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12-01-2020, 06:43 AM
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#14
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Recycles dryer sheets
Join Date: Feb 2020
Location: Danville
Posts: 167
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To Dtail: Currently, 65% of my net worth is diversified in various index funds in 401ks and an IRA. 35% is in my stock portfolio which has only one stock in it.
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