Today in Matt’s minute, he introduces us to the "Holy Grail of Investing" according to Ray Dalio, the Chief Investment Officer of the world's largest hedge fund. We've talked about diversification in a prior video, specifically about a time based way to diversify.
But, back to Ray Dalio. He says, "“Making a handful of good uncorrelated bets that are balanced and leveraged well is the surest way of having a lot of upside without being exposed to unacceptable downside.” A mathematician would tell us its all about weighted averages, covariances, etc. But let's face it, math or no math, diversification is a main strategy for many people, just ask a farmer about eggs and baskets..
Watch this video for more information, including a example. Then ask yourself, "Am I using diversification strategies to provide better risk adjusted returns?" Comment below and let us know.