“There is no such thing as a free lunch.”

And I totally agree with that proverb, especially when it comes to investing.

Like when an insurance salesperson comes to your home *gratis* to discuss insurance options. 

Because fees that come with investment-linked insurance policies are so high that it’s likely the most expensive appointment you’ll ever have in your life!

Anyways, there is one exception to this rule, as put simply by Nobel prize winner Harry Markowitz. 

“Diversification is the only free lunch." 

Harry Markowitz, Economist and Nobel Prize winner

Here is the thing:

Diversification is a great way to reduce risk. And best of all, you can do it “for free.” Meaning that you don’t have to pay extra for the service. 

And that’s unlike any other kind of ‘risk-reducing’ strategies that the bank may try to sell you, like a fund where they adjust the percentage of shares and bonds according to market movements.

Just to be clear: almost nobody can adjust percentages on the go successfully, not even the specialists. But that won’t prevent them from charging you big time for the extra service!

… which is why sticking to a simple portfolio of well-diversified ETFs (=low-cost funds) is a better way to go. 

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That’s all I had for you today!

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