There’s an old line we’ve all heard, don’t put your eggs in one basket. It’s cliché, sure, but it became my north star after a few bruises from markets that moved faster than my assumptions. I’m practicing it now, imperfectly, but the direction is clear: diversification isn’t just a tactic, it’s a habit that keeps you in the game when one leg of the stool wobbles.
The good news is that diversification has never been more accessible. We can build across real-world assets, public markets, and digital rails without needing a private banker. In practice, that looks like a simple three-bucket approach:
1) Real-world assets. Cash flow and collateral matter. Think cash reserves, gold, and where it fits, productive real estate. This bucket is the ballast. It won’t moon, but it helps you survive bad weather so you’re around for good weather.
2) Public markets. Broad equity ETFs, select sectors, and even dividend funds. Here, I try to buy the market’s resilience instead of guessing every winner. Dollar-cost averaging plus a long runway beats my “clever” timing nine times out of ten.
3) Digital assets. Crypto belongs, but with rules. For me, a Bitcoin core, a measured slice of Ethereum, and only targeted positions in higher-beta names. I size this so a drawdown stings, not sinks. If I can’t sleep with the allocation, it’s too big.
The thread that ties these buckets together is process over prediction. I don’t need to know which chart breaks out next, I need a portfolio where one piece can be flat while another carries the load, and vice versa. That means rebalancing on a schedule, writing my ranges before emotions show up, and accepting that “not perfect” is still progress.
If you’re earlier on the path, start with weights you can live with, say 50/35/15 across the three buckets, and let contributions and rebalances do the quiet compounding. Over time you can tune it to your risk, your cash-flow needs, your season of life.
Your move: how diversified are you really when you look at correlations, not tickers? And if one basket fell tomorrow, would you still be standing the day after?