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Good day subscribers thank you so much for joining me today i am jeremy this is the financial education channel and today is a very short video where i’m basically telling you why stock market diversification is a bunch of when you learn about stocks like investing 101 and you learn about it in school or wherever you learn about it they talk about stock market
Diversification they talk about being diversified in all these different things and being in this industry in that industry and all this type of stuff that’s a bunch of in my opinion i’ll tell you the one scenario where dirt diversification diversification actually makes sense i’ll tell you the one scenario at the end of the video basically why is it a bunch of bs
Well okay you have let’s say 10 stocks you keep track of right do you think you’re gonna feel any bit as confident in stock number 10 as stock number one i highly doubt it do you think even you’ll be as confident in stock number five your fifth favorite stock compared to your number one no it’s not i’m gonna be close i do a series every week called three stocks to
Buy now or three stocks i’m buying now or whatever in that series i can tell you the confidence i have in my number one company versus my number two company is substantial difference i have way more confidence in my number one company that my number two company and have way more confidence in my number two company then my number three company so by the time we get
Down to four five six seven eight nine ten do you think you have much confidence at all in those type of companies when compared to those top ones no which is why i have always been invested in generally speaking around two to five companies at a time that’s me sometimes i’ll be only in two companies sometimes i’ll be in as many as five companies but the more you
Get in and you’re more you’re getting invested in this stock in this stock how do you supposed to become confident in you know stock number seven compared to stock number one number two so you’re just wasting money at that point and you could say well what if stock number one goes down yeah well what if stock number seven goes down in stock number one shoots way
Higher then you missed out on the big potential gain which is the stock you thought was gonna do great and the stock you were like kind of okay on number seven that went down that doesn’t make any sense it literally does not make sense so in diversification that sometimes is okay if you’re getting too heavy into one sector like say you’re like invested in ford and
Gm and tesla and like every car manufacturer or something like that that might be a little crazy in my opinion i probably wouldn’t do that and go all in on one sector of stocks that you might want to diversify and get you know around and whatnot that doesn’t make sense but the one scenario where i’m like okay stock diversification that’s okay that one scenario is
For retirees people that are really over the age of 65 and are not really looking to make that much money anymore but at that point you’re more like how do i keep my wealth how do i keep it i’m not worried about trying to get great gains and those kind of things i’m trying to manage losses and maybe just trying to collect dividends and then reinvest those dividends
And things like that you’re just trying to preserve wealth or say maybe you sell your you’ve created some type of app the social media you sell to facebook for 50 million great and you’re like man i’m never gonna do anything that great again in life i just need to preserve this wealth for the rest of my life so i can live like a rich person forever okay that makes
Sense just diversify and you know the entire s&p 500 spread the money around and you’ll only do as good as a stock market does or as bad as a stock market does in those type of situations okay but in a situation when you’re in your 20s 30s 40s 50s even and you’re a normal person it makes sense to try to build wealth you’re trying to build wealth so why not try
To build wealth in the stocks you’re most confident in rather than ones that are way down there so that is the video today i just wanted to give my opinion on this i know a lot of you guys are or beginners in the stock market or kind of like maybe like moderate level so you probably hear that term a lot diversification you see here it on cnbc and bloomberg they
Talk about being diverse finals things i wanted to give my take on it because my take is very different than what they say on the commercials and things like that when they’re trying to preach about diversification oh you need to see your financial advisor today cuz you need to be diversified blah blah blah oh anyways thank you so much for watching today you guys
I appreciate it if you haven’t subscribed you may want to talk ton about personal finance talk about business on the a young entrepreneur talk about entrepreneurship and we talked about the stock market like we did today thank you for watching guys and have a great day you you
Transcribed from video
Why Stock Market Diversification is a bunch of BULL! By Financial Education
