I like how the thumbnail gives you the answer

Eggselent explanation!

I do about 80-90% in index funds for diversification purposes, then about 10-20% are in a few companies I do research on that I have a strong belief will outperform the market. So far has been working quite well for me.

I'll be the voice of the internet and criticize your statement between 3:28 and 3:44, because I think it is a common fallacy among people in the financial market in general. Restating here the important bits: "banks benefit from rising interest rates, (...), while real estate companies benefit from falling interest rates (...). Holding investments on both, therefore, reduces the risk of your portfolio taking a hit from interest rate changes - one way or the other" Let's assume what you said is roughly true. If banks benefit from rising interest and real estate companies benefit from falling interest rates, then their stock movements are indeed correlated with the interest rate movements. Indeed, the correlation coefficient would be close to -1, instead of zero. Therefore, holding both stocks actually is a bad idea, because they cancel each other's returns, while still being subject to market risk. A position like that would have actually a negative alpha.

Thanks Richard! I'm doing CAIA now and you've explained everything much easier :D.

Diversification though a very common topic in investment, you have made the video very balanced & comprehensive with different approaches and at the same time succinct. The cherry on top are your great graphics and editing. Well done Richard!

I was looking for this tool for a while, thanks! It is very useful.

love this channel! Love the fresh style you teach

You make such awesome and educational videos ! Great job again

This video was made 2 years ago. There hasn’t been trading fees at least in the US for way more than two years. Removal of trading fees and fractional stock purchases really revolutionized the ability for average people to invest on their own. God, I remember $7 trading fees from Fidelity. It really sucked to be down as soon as you make a purchase.

Thank you so much, I was looking forward for a video like this. It's a blessing that your channel exists.❤️

Could you talk about Japan Massive Debt and Italian Situation, like you did in Greece Video?

Great video. Maybe tackle dividend vs growth vs spec/growth? Portfolio pros/cons next time?

One of your best videos so far, great job!!

I know you covered gold but can you do a video on commodity trading generally and how to get into this? Also, a video series of the various bonds investors can use would be great!

About the effect of the number of stocks on volatility (around 5:47), I've always though that it only applies for randomly selected stocks. Is that correct? For active management, stock selection is not random, so maybe the graph does not reach a plateau in the same way.

This video says to limit the number of stocks for diversification. I'm curious as to the number of mutual funds and do mutual funds behave similarly after 20 to 30?

Great speech and graphics!

Cool video! Do you think you could make one about the Greeks (Alpha, Beta, Sigma, etc) and maybe shed some light on the Dynamic Beta vs Alpha?

How safe is a capital protected mutual fund ?! Is it safer than or equal to bonds ??

Hey man! I needed some advice if you don't mind. My bank offers me 1.25% interest on 3x leverage investing. Do you think its worth just leveraging a few ETFs mostly the S&P 500 for long term gains? I would keep around 30-40% cash to be able to fill any margin calls I get. Thanks!

Diversification is the key to a well rounded portfolio

Great content. Thank you

Can you do one about what a market maker is??? There are no good videos out there for that.

Ok so how many diffrent stock should i own for portfolio

Hello, i know that around a year ago you made a video about options but you did not mention things like for example : a stock split does not affect the underlying option value etc. etc. and what other things might happen but does not make your option more profitable or the reverse ( another example would be when a stock exchange or broker like in china closes the market but you have an option expiring in that day ) . Can you make a video and delve deeper especially now that option became more popular. I hope you understand what I am asking.

Over diversify or not to overdiversify, that is the question.

I just did the asset correlation from the website mentioned in this video. Can you tell me what would be considered a good or bad correlation % number (11 stocks, 10 ETFs, currently)? I understand what a standard deviation is. but I'm seeking a percentage to understand good v bad.

Great video! Could you do one on the 'Efficient Frontier' sometime?

Do a video on the relationship between futures and stock prices.

1:27 those are some risky bagels to invest in

Hey Richard, thanks for this helpful video. Any chance you could do a video on ways to invest the right amount like Kelly Criterion and others?

Top content! Subscribed!

Congrats for 200 k

Could you make a video about hedge funds?

can u use time stamps in your video?

PLEASE FOR THE LOVE OF GOD MAKE WEEKLY VIDEOS

If you're a buy and hold passive investor, more diversification is always better. These investors use market cap weights so they don't trade much even within the fund. Market cap weighting is kind of a natural rebalancer. Having 0.0000005% of your money in some micro-cap doesn't effect the price of the fund much but it still non-zero. All that said, performance of VTSMX is nearly identical to VFINX.

Not sure if you have already covered this topic, but could you explain the main differences between ETFs and Mutual Funds. Thanks for the great content!

Hey Friend ! Great Video ❤️✌️! Can you please make a video on books that are helpful for beginners to learn investing ?

What transaction fees?

Hi. Thanks for a very simple but thorough explanation. Your videos are really fun to watch. Would you do a video on moving averages? I keep hearing the term but don't seem to grasp the concept. Maybe discuss the pros and cons of investing based on moving averages? Thanks.

6:22 "high transaction fees..." I don't think any of the major brokers do this anymore. The fees are usually waived at most major places as long as you do them online.

I have 26 holdings. None of my holdings are above 5% of my portfolio. I'm able to keep track of that many companies, so it isn't a big deal. I'm hoping I don't have to change anything for at least 10 years.

keep it up 👍

Love youuuuuu

The only reason to split your investing portfolio, is when you dont find one or two stocks that you value the most. When you split your investing year you have lower chances of losing all, and make more. In the end the out come of the risk reward stay the same if the risk and reward are the same for all the companies. When you split your portfolio you are just saying that you dont know what will be a good investment. Even look at the S&P500 if you will choose only one stock, you can easily find one that will beat it all. Just research and find a company or a sector that you like a believe in, figer out the data and busines plan, and stick with it. If you fail it mean's that you have no clue of to value a stock and just find some ine who will do it for you

"The way to become rich is to put all your eggs in one basket and then watch that basket. " ~Andrew Carnegie "Keep all your eggs in one basket, but watch that basket closely." ~Warren Buffett

for an active investor, 3 to 20 is about right

Hey bagel. I went trough your videos and didn't find any videos talking about passive income. Basically gaining money from the companies, because you own a part of those companies. How come?

You only need a few holdings if you research them before buying as much as next car. Diversification can cause you to put money all over, and watch one take over the portfolio. Of course, if the object is to diversify instead of make money, your choice.

Still the best Canadian finance KZfaqr!

yes

I am probably way to diversified by most standards. I have large positions and small positions. I feel much safer having exposure to the broad market. In fact, I want to diversify more than I am. I just know leaving my wealth in cash is not a good idea.

I'm 100% diversified in GME

How much money you start with for investing?

Theoretically, you would want to find positions with a -1 correlation (one goes up when the other goes down) not 0. 0 means no correlation at all, which is completely different than negative correlation (yes, negative here is good). Of course this doesnt happen in the real world, although the closest you may see is a correlation of .3 (Japan).

My entire savings is almost 50% in my company’s stock. As in, the company i work for. ESPP. I just haven’t gotten around to divesting. Pay income taxes for the ESPP discount so…I don’t like it. Plus, it’s barely broken even or might even still be red. I don’t want to pay taxes for essentially earning nothing.

Or put it all in Apple, Amazon, Facebook and Microsoft.

I think investing in like Gold and stuff not only stocks is important too

I get it but don’t u think buying a real estate company and bank would be just parking your money? Seems to me like the same situation where you bet on the win of a team and a loss...

Simply you can do between DJI and Dax

Random Walk Down Wall Street, a great Book on diversification.

As much as I would have loved to have 100% in Tesla, I'm good with having 10% of my portfolio :)

i used to be 100% into calls on micron, im now 50% calls and 50% stocks. thanks

3:00

When you have too many eggs, make an omelette.

Gotta spread out your eggs into different baskets...just in case

only for people who can't analyse businesses tho , if you can analyse good companies why put money in bad companies.

*Some people put all their eggs in one investment and personally I think that is very risky. What happens if that one investment fails?* 🤔

Cross over with @benfelix?

I was worried because my cream cheese was going bad 🥯

Maximize your loss with a nice even spread

You don't diversify you get burnt.

The 24 people who disliked have no life

if you are paying any sort of fee for ANY stock trade / etf purchase in 2020 you are doing it wrong...

It is important to put money into some great stocks and then look for some bad stocks to balance it out, right? What about just selling your stock when they start dropping. Buy again when they start rising. I got crappy results when I use to diversify and great results when I bought no more than 3 stocks at any time. I can easily monitor 2 stocks at a time and have made over 40% per year for the last 5 years.

Good thing I'm planning on holding 5 ETFs for 5+ years.

46th?

A little heart please!

Hehehe he said idioms

*still buys SPY* 😬

buy gold. inflation will do the rest

Warren Buffet and Charlie Munger has a different take when it comes to diversificaion. I wonder why?

Buy land, they're not making it anymore.

3:43 Terrible advice given 2008..

From my point view and my experience all this years in stock market, you need to invest smartly, if you need good things of life, i made over $240,000 last month and still counting from my diversified portfolio strategy and i believe anyone can do it if you have the right strategy. mutual funds takes a long time but investing smartly is the key to short term

First haha

Diversification doesn't work, just look at the state of france, Germany, uk and especially Sweden.