–Keisha Bailey
We all grew up hearing the old saying “never put all your eggs in one basket,” so back in the day, I would hide my little savings all over the house, and even in the backyard, just in case my siblings found it. I knew there would be a low chance of them finding my “money stash” and my savings wouldn’t all be gone if they did.
Well, it worked! My complete money stash was never fully discovered and I was able to have a good amount of money in savings by the time I was a teenager.
Never put all your eggs in one basket. If you want to be wealthy and create financial freedom for yourself and your family, then your money needs to be put into multiple “baskets.” You need to have, at the very least, your daily transactional savings account, an emergency fund, and most importantly, your investment portfolios.
Starting your investment portfolio
As you set out to build your investment portfolio, it is good to start with what you know. This means choosing solid companies with great fundamentals. These are companies that you grew up hearing about and seeing, and these are the same companies that will outlast you. These are reputable companies, and they make the most fantastic domestic investments. These companies form what will be your core portfolio – your first investment basket.
As you seek to grow your wealth you can then begin to start thinking broader by getting investments outside of your home country in order to create your second investment basket. The secret sauce in doing this successfully is a concept called geographic diversification.
Geographic diversification is a drastically underrated investing strategy, yet this is a key motivating factor for most wealthy investors who buy stocks in foreign companies.
Understanding geographic diversification
While living in Jamaica, personally I would do investments in Jamaican companies and only considered some investments in other Caribbean companies because as a portfolio manager we were focused a lot on Jamaican Stock, Jamaican Bonds, Jamaica Corporate Bonds and some Caribbean investments. This was mostly because of the BOJ regulations where local companies were not allowed to invest too much money internationally, as such, I didn’t know much about investing internationally.
However, when I moved to Canada and started investing as a portfolio manager on a more global scale, that’s when I was able to realize how broad investments can be. When you begin investing globally, that is really when you get to experience the benefits of diversification and start building consistent lasting returns in your portfolio.
Consider globalization
These days, due to the pandemic and overall globalization, it is much easier to invest outside of your country. Information is readily at your fingertips because of the internet, and you have a lot of financial educators and influencers, like myself, who are providing you with a lot of information about financial news and updates outside of your country.
Diversifying your investments from a geographical perspective, means that your investment portfolio is spread across many different regions in the world which reduces risk, improves returns, and allows for even greater exposure to investing opportunities.
Another amazing benefit to a geographic diversification of assets has to do with the way it allows you to mitigate risk by taking advantage of more stable economies and currencies elsewhere in the world. I show people how to create an international portfolio and to look at investing, especially in the US stock market given that it is a very liquid market with access to many more types of investment securities.
The future of investing
Going into the future, the investor who is going to be extremely wealthy is the investor who has investments across the world, because some countries now are in very rapid growth.
Taking full advantage of geographical diversification is one of the best ways to generate peace of mind when investing, because in doing this you would have done your part in not only creating financial freedom for yourself and your family, but you have also secured it for your future generation. Consider rethinking and repositioning your investment portfolio so you can strategically maximize and protect your wealth.
Keisha Bailey is the CEO of Profit Jumpstarter, where she works with investors to create highly profitable portfolios so they can build wealth faster. As an experienced wealth coach, she teaches how to earn passive income, create wealth, reclaim time and reach financial freedom by investing.
