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Traditionally, the best investments have been reserved for the elite.
Traditional investing principles say the higher the risk, the higher the reward.
However, constantly exposing your portfolio to risks can keep you from reaching consistent, steady returns.
For example, lets say you are investing in a stock that you feel can triple in value.
What happens if the company goes bankrupt?
Another example would be heavily investing in a certain sector.
Lets say that you believe that the tech sector will experience rapid growth.
As a result, you put all of your investments into tech stocks.
Now, lets say that the government decided to heavily regulate the tech industry, causing widespread losses.
Since you didnt purchase any other investments, your portfolio will likely drop in value.
As Robbins said, Diversification is the only free lunch.
However, this strategy isnt foolproof.
In 2008, both stocks and bonds went down.
Pursuing total market stocks and ETFs also isnt the best strategy.
Although holding those items can simplify your investing strategy, you could leave money on the table.
Robbins suggests that private investments are the best way to build wealth and ultimately diversify a portfolio.
Today, you could invest in private equity firms as a limited partner.
This gives you access to every fund they own instead of just one company, unlocking ultimate diversification.
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