Ken Fisher Explains How to Build a Well Diversified Portfolio
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- Опубліковано 6 лют 2025
- Is your portfolio properly diversified? In this video, Ken Fisher examines the fundamentals of portfolio diversification and why it matters for your retirement portfolio. To build a diversified portfolio, consider the core concept of Harry Markowitz’ Modern Portfolio Theory (MPT). According to MPT, you achieve diversification by blending multiple securities with negative short-term correlations but similar long-term return expectations. In practice, a diversified portfolio should blend securities from a broad range of market sectors and categories-this generally results in lower volatility because as one goes up, another might go down.
Ken Fisher states that when it comes to stocks, no category should have superior returns forever. As one category gains notoriety for superior returns, the market will create new supply within that category to meet increased investor demand. This will eventually bring the category back in line with the broader market. In short, Ken purports that stock returns from different categories and sectors tend to even out over long periods.
According to Ken Fisher, in order to build a diversified portfolio, you should mirror a global index. From there, you can choose to overweight sectors or countries you think will outperform and underweight categories you believe will underperform-but be careful! Ken Fisher warns investor overconfidence can have detrimental impacts to long-term portfolio returns. In order to perform better than a broad index, you must know something the market hasn’t already priced in.
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Investing in securities involves a risk of loss. Past performance is never a guarantee of future returns. Investing in foreign stock markets involves additional risks, such as the risk of currency fluctuations. The foregoing constitutes the general views of Fisher Investments and should not be regarded as personalized investment advice. Nothing herein is intended to be a recommendation. The opinions expressed are subject to change without notice.
This is why I just buy the total world index fund or ETF and not concern myself with the CNBC crew. Ken Fisher has amazing insights.
What is it's cagr
Thank you sir. I'll never be tired of your wisdom.
I love Ken Fisher's advice
If you Ken say most of the time don't know more than other people knows. What a simple man like me can know? Thank you so much for such a wise words!
Love it.. humbleness through intelligence.
Thank you so much for explaining so clearly ! Much appreciated
Great video. It makes sense... or makes cents. Great thing about owning the market with an index fund or index ETF... low drag, more compounding impact. Set it and forget it. I need to fix the mess I made of my portfolio, but I did have fun with it, thinking I knew something or thinking I had an edge. I still made some solid moves though, but I do need to fire some fund managers.
Good answer. It’s a good time to fix the mess in our Portfolios.
Making sense is greater than just making cents. Ben Franklin is the father of phrase a penny saved Ken is the mind FI and all the great minds than exist there at FI.
Thanks much for the insights. I miss your Forbes columns....
Legend..
Great vid ! More than $1000000... Value insight.
Great video. Thank you so much
Yet another greatly helpful video. I highly appreciate Mr. Fisher doing these for us. I wish I could understand, though, what he means by "pre-priced." He's said it often in other videos about certain things "already priced" into a company's stock price.
Means something like, you estimate the company will earn X in the next decade, but there is a 30% risk that it may earn X/2, and even a 5% risk that it may go bankrupt; based on all that information and the target return you want to achieve, what are you willing to pay for that company.
What he means is that if, for example, you think that a certain stock is a great value at this time because you believe some event that is going happen in the future will make it more valuable and will push the price up, it is likely millions of other people who also believe that event will happen have already looked at the stock and already bought it before you and drove the price up, so that the increase in value that will happen in the future is already factored in to the stock's current price.
Great advice!
Take THAT day traders!!
Makes sense to me, but doesn't this contradict his argument for buying individual stocks?
Do I know something that everyone else doesn't? Isn't that one of the only three questions that count?
TU FI keeping it simple to know makes me sleep at night.
We all know that old adage that both the Bulls and Bears can make money, but we don’t like to recognize that most of us are piggies.
Piggies get slaughtered.
Don’t be a piggy. Don’t think you know more than you do.
I’m still unfortunately, am realizing the limits of ME!
I think the saying is more like, "Pigs get fat. Hogs get slaughtered."
He is saying look at your historical investing returns, sectors, products. Recognize the areas you are weak (underperformed) and others you may have consistently after averaging many years (outperformed) Focus, manage your risk, age, and Do Not try to be a Hero (lottery winner) type of investor. Incrementally invest, check to confirm your investment products balance, and performance is consistently obtainable and Realistic.
A wise man once said he who knows to much does little.
Hi Fisher. Good video. Do more tweets abot market. All of us follow you in tweet
But one that listens well is on solid ground.
Dear Ken, my name is Jason from Korea. There were 4 스승 in my life. If you are getting old and our past is servered, you are the only person who can tell me of your father - Phillip Fhiser and legacy that we pursue. My life goal is only the time I can hear about your family and Mr. Fhisher because I am the next