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Wisdom to Wealth: Thursday, May 6

Updated: May. 6, 2021 at 5:52 PM EDT
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John Halterman:  Do you believe that asset allocation is the best way to manage downside market risk?  Well, I gotta tell you, I’m not a fan of that.  And the reason behind asset allocation is, you’re going to hold a bunch of different asset classes, such as stocks, bonds, real estate or maybe even emerging markets.  And the idea is that not all things are going to move in the same direction at the same time.  Well, I gotta tell you, in the last thirty years, if you look at that, it’s really not that effective.  And the reason why I say it is simply because of globalization and technology.  As a simple example, right now when something big happens, and it goes to crush the market, well, basically, the market gets crushed all across the board.  And what we’ve seen is, when the United States has problems, the rest of the world has problems.  Or, when there was a coronavirus, it spread so quickly that it caused problems again, all across the United States.  And so, if you own asset allocation, I gotta tell you, I believe there’s better methods to manage downside risk.  For more answers, call or visit my website today.

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