The Three Pockets Approach to Investing
After decades of working on Wall Street, the secret to investing successfully still remains the same as I had first learned in my early years.
Actually, it’s no secret; many investors have heard it already. The problem is that too many investors still do not practice it. Simply put, if you invest over a period of time, properly diversify across a variety of asset classes and leave the portfolio relatively stable, it will undoubtedly grow at a greater rate than by leaving it in the bank, but with much less risk than trading.
Why is it that so many people don’t follow such a straightforward plan?
One answer comes from listening to what people say about their investing strategy. Over the decades of helping investors of all ages across some 25 different countries, I have been amazed at how frequently I have heard the same statements in multiple languages from people at all levels of sophistication:
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