Investing should be easy – just buy low and sell high – but most of us have trouble following that simple advice. There are principles and strategies that may enable you to put together an investment portfolio that reflects your risk tolerance, time horizon, and goals. Understanding these principles and strategies can help you avoid some of the pitfalls that snarl some investors.
Ancient Chinese merchants are said to have developed a unique way to manage their risk. They would divide their shipments among several different vessels. That way, if one ship were to sink or be attacked by pirates, the rest stood a good chance of getting through and the majority of the shipment could be saved.
Your investment portfolio may benefit from that same logic.
Required Reading: The Economic Report of the President
You Would Rather Be...