Diversify of Go all in?
These two strategies seem to be at odds with one another, but in reality they can coexist in the same portfolio based on where you are in the Wealth cycle (as discussed in lesson 4)
The choice between these 2 options also depends where you may find yourself in your Journey to Financial Freedom… ALL investment advisors will tell you to diversify across multiple asset classes when investing with them even if it’s just a small amount of money and they will “rebalance” your portfolio quarterly.. This means they will take away profit from areas that have done well and invest those profits into things that are losing.
If you are already wealthy this is a great way to hedge yourself to maintain your wealth, but if you are looking to become wealthy from investing the little you have it will only keep the little you have.. Well little.
If you are looking to become Financially Free it will require LARGE Risk on calculated, Asymmetrical, bets you have done research on.
An Asymmetrical Bet has extreme upside with small downside potential.
For Most people this will be a business you have started and know about.
It can be done in the markets, on Stocks like Tesla or others who are close to bankruptcy or fall under investigation by the SEC. In these situations most would perceive these to be High Risk bets. However, if you have done your homework, and know that there will be a Merger or Acquisition if the business does fail then there exists your Asymmetrical Bet.
Mergers and Acquisitions are a great way to see LARGE Short term Gains in stocks who are significantly undervalued for one reason or another.
The other way to see significant upside is to be an Early Adopter. This is someone who bets against the status quo for what is the current way something is done, because they can see the trend for how things will porgess 3-5 year into the future.
An example of this opportunity would have been Netflix and Blockbuster. Netflix offered to sell to Blockbuster for $50 Million in the mid 2000’s. Blockbuster’s board laughed and turned them down… Little did they know adding candy to their checkout lines was no way to compete against a company that would revolutionize how people consumed entertainment.
The Current Early Adopter play is Blockchain, CryptoCurrency, Digital Assets, and NFTs.
I’d be willing to bet my left nut over the next 3-5 years More wealth will be made in this space than any other Asset Class in History. The Caveat is doing the research, and placing large bets on the options that will last after regulations and be used for a purpose inside the internet of value.
This is where diversification and Going all in Can exist at the same time. Picking 3-5 digital assets right now that you have researched thoroughly, is a great way to diversify while still placing all your eggs in one basket you KNOW is an Asymmetrical Bet.
If your are interested to find out which options will create the most wealth over the next 3-5 years. Subscribe to the site and you’ll get to see all my price projections and ROI calculations.