What Would Warren Buffett Do?

Check out this article from Inc.com about Warren Buffett and the benefits of true diversification.

I agree with the author that truly diversified portfolios are the best and most successful way to invest over time.  However, I disagree with his assertion that "Diversification is complicated stuff."

To be truly diversified, just buy everything.  Yes, I mean everything.

My prescription:  Buy the entire domestic stock market, the entire international and emerging stock markets, add a dash of real estate stocks and some fixed income and you've got yourself a diversified portfolio.  Not really rocket science, if you ask me.

But if diverisifcation works and it's not that difficult, then why doesn't everyone do it and more importantly, why isn't everyone wealthy?

Well, there are several reasons this is the case, but the single biggest factor that contributes to a less than successful investment experience is your behavior.  That's right, it's what you do and when you do it that will have a much bigger impact on your investment results than whether or not you're the next Warren Buffett.

Have a wonderful and safe 4th of July weekend.