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What Is True Diversification?

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Manage episode 482831217 series 3187165
Content provided by tastylive. All podcast content including episodes, graphics, and podcast descriptions are uploaded and provided directly by tastylive or their podcast platform partner. If you believe someone is using your copyrighted work without your permission, you can follow the process outlined here https://podcastplayer.com/legal.
This Options Jive explores the importance of true diversification in managing portfolio risk, especially during market downturns. While spreading investments across sectors can help, sector ETFs like those in technology and consumer discretionary often show higher volatility than the broader S&P 500 (SPY), as seen during the recent tariff-induced crash. In bull markets, sector diversification may suffice due to lower correlations with SPY, but in bear markets, these correlations rise, limiting its effectiveness. The video emphasizes that real diversification involves investing across different asset classes—such as equities, bonds, and commodities like Gold—which can offer stronger downside protection when markets fall.
  continue reading

68 episodes

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iconShare
 
Manage episode 482831217 series 3187165
Content provided by tastylive. All podcast content including episodes, graphics, and podcast descriptions are uploaded and provided directly by tastylive or their podcast platform partner. If you believe someone is using your copyrighted work without your permission, you can follow the process outlined here https://podcastplayer.com/legal.
This Options Jive explores the importance of true diversification in managing portfolio risk, especially during market downturns. While spreading investments across sectors can help, sector ETFs like those in technology and consumer discretionary often show higher volatility than the broader S&P 500 (SPY), as seen during the recent tariff-induced crash. In bull markets, sector diversification may suffice due to lower correlations with SPY, but in bear markets, these correlations rise, limiting its effectiveness. The video emphasizes that real diversification involves investing across different asset classes—such as equities, bonds, and commodities like Gold—which can offer stronger downside protection when markets fall.
  continue reading

68 episodes

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