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Here is why your portfolio should be invested in 95% safe and 5% fun investments.
Also see the nine best safe and low-risk investments for August 2024.
What Does Fun vs.
When building your wealth, its wise to consider a diverse range of investment options.
For example, funds that track the broad stock market provide exposure to approximately 3,000 companies, Williams said.
Or maybe someone is just a big fan of particular companies and wants to buy their stock.
Thats where the 5% fun and 95% safe strategy could come in handy.
And in doing so, you could become more engaged and comfortable with investing.
Staying actively involved with the markets keeps you in the know.
Its tough to make smart guesses if you dont understand whats happening with a particular company, Williams said.
This often leads people to develop a real passion for investing.
Ive seen young advisors get so into it that they decide to become Chartered Financial Analysts.
In the 1990s, this client worked for a prominent tech company whose stock soared during the dot-com boom.
Although the company didnt go bankrupt, it never regained its former highs.
Fun investments are a really great way to develop good financial behaviors, but they have their downside too.
More than once, Ive seen fun investing turn into something that looks more like a gambling addiction.
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