Mary: This is Mary Walden with economist MW, welcoming you to the economic perspective. Today’s program looks at the value of a diversified portfolio. Mike, as the stock market has been rocked in recent weeks by the fears related to the coronavirus, many people are re-evaluating their investment strategy. Are there any investment lessons we can take away from recent events?
Mike: Summary Answer
- Yes, a big one is that in any investment environment, there’s usually some investments that do well
- See this now – if own bonds that you earlier bought at higher rates, they are now worth more as rates on new bonds have dropped
- Also, some commodities – especially gold – have risen in value since the coronavirus outbreak
- This recommends that the average investor wants to consider having a diversified portfolio
- Some in stocks, bonds, commodities, real estate, cash, etc
- Premised that investors don’t know precisely what will happen – if diversified, should always have something that is doing well
- I’m MW
Mary: And I’m Mary Walden for the Economic Perspective, an NC State Extension program from the Department of Agricultural and Resource Economics.