Factor In Your Income Sources When Seeking Diversification - Nest Egg

Factor In Your Income Sources When Seeking Diversification

When it comes to diversification, you have to look at your entire life and not just your portfolio.  Several years ago there was a book I really enjoyed that dealt with this topic called Are You a Stock or a Bond?: Create Your Own Pension Plan for a Secure Financial Future. It provided a valuable framework for understanding how the stability of income in your life should inform your approach to asset allocation.

Charlie Munger Value Investing Strategy

Charlie Munger Value Investing Strategy

Charlie Munger, the Vice Chairman of Berkshire Hathaway, former hedge fund manager, and billionaire value investor, was instrumental in changing Warren Buffett’s way of thinking about value investing. Charlie insisted that the investor would be better served by focusing on better quality businesses, even if the price were higher, because those businesses could be held for decades, continually churning out cash and profits for the owners. In fact, it was this influence that resulted in Berkshire Hathaway shifting from acquiring undervalued “cigar butt” companies such the textile mills for which the firm was named to high-quality companies such as Coca-Cola.