Warren Buffet, one of the most successful investors of all time, said that “a diversity of commitments creates a most attractive package of safety and appreciation potential”. As investors work to improve their financial portfolios, such diversity should be approached with caution because the security and risk associated with different investment options can vary.
Mutual funds are collective pools of money provided by individual investors for money managers to invest in various securities. Since funding is a group effort, each shareholder or investor benefits and loses equally, and expenses are shared. While mutual funds are diversified between stocks, bonds and other securities, they are typically less risky than individual stocks or bonds.
Diversifying your commitments is a great strategy, but the risk of each opportunity should be carefully considered. Work with your Enso | Sonoma financial advisor as you make these important decisions.