Here at the offices of Empowered Investor Network, Wall Street is a favorite whipping boy, and with good reason. The lame class of assets (stocks, bonds, mutual funds) they peddle haven’t worked well in the past, aren’t working now, and won’t work in the future. We’re fairly certain of this because we’ve seen the numbers.
But even a blind hog finds an acorn every once in a while and so it is that Wall Street brokers do talk about one idea that makes sense – diversification. Problem is, their idea of diversification hinges on the concept of diversifying among “assets” that won’t even appreciate fast enough to keep you ahead of the true rate of inflation, which is close to 10%, regardless of what the doctored government numbers say.
If we look to the dictionary for a definition of the word “diversification” we come up with “the act of introducing variety…”
We don’t believe that it’s possible to have true variety when you confine your investments to a stock, bond, or mutual fund portfolio. Each of these will have their relative value decimated as inflation increases. When the stock market takes a tumble, almost every individual stock goes with it.
Real estate is different, especially within the context of rental properties. You can achieve actual diversification investing by this method when you buy properties in different geographic areas. Contrary to mainstream media babble-speak, there is no single housing market to crash. Each area rises and falls according to its own rules so actual diversification is possible.
Check out the Creating Wealth podcast, hosted by Jason Hartman at www.JasonHartman.com to learn what diversity really means. If you believe your stock broker’s idea of diversification, you’re headed for a rude awakening.
The Platinum Team
