Homeopathic financial planning

I once saw the famous magician, James Randi, eat an entire bottle of homeopathic sleeping pills.

He did it on live T.V. and… lived to debunk alternative medicine another day.

Was Randi’s stunt an illusion?

Nay, Mortal.

If you’re not familiar with homeopathic medicine, it’s basically the idea that you can dilute real (or alleged) medicine down to a point where there’s essentially nothing left and… the water (or alcohol) you dilute it in carries the “memory” of what used to be the full-strength medicine.

Anyway, Randi wanted to demonstrate that it was hokum.

Reminds me of the idea in financial planning that diversification reduces risk.

Let’s forget, for a moment, that 2008 happened which neutered that sacred cow.

Diversification CAN lower risk but in doing so also reduces return… something the ex-spurts routinely gloss over.

Taken to the nth degree… you can dilute your risk down to a point where you’re earning… basically nothing.

Unfortunately, there’s no “market memory” left in your diversified portfolio to deliver returns.

On the other hand… concentrating your risk has the potential to boost your return but… it’s risky.

Ok, enough yammering. let’s rap about something important.

If you want to know how to reduce your risk while increasing your potential investment return, you’ll definitely want to know about the barbell strategy.

… something made insanely simple if you’re willing to use whole life insurance as your safety net.

More details when you sign up to my email list.

David Lewis, AKA The Rogue Agent, has been a life insurance agent since 2004, and has worked with some of the oldest and most respected mutual life insurance companies in the U.S. during that time. To learn more about him and his business, go here.