Cross-train (The Financial Athlete #92)

A lovely, red-haired and very fit seventy-year-old Irish lady friend passed me by at the fitness center and said cheerfully, “Hello! So, what’s it going to be today? Swimming? Tennis? Weight lifting? Yoga? Did I miss something?”

I don’t remember my answer, but I do remember what she said after that. “The older we get, the more we have to cross-train. It’s not about being a specialist anymore. It’s about maintaining well rounded health and strength.”

How do we cross-train with investing? With money we do this by investing in different asset classes. Not all money is directed to paper assets (stocks and bonds) or real estate. In a bear market, about 3 out every 4 stocks decline. So, if you’re only invested in stocks, you’re not really diversified even if you own stocks of hundreds of companies. For this reason, you diversify into other assets classes that generally have little or no correlation with the returns of the assets you own.

Beyond this, think of investing in broader terms, “cross-train” to develop body, mind, and spirit. This makes for a much richer life.

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