Why Diversify

Where does Dave put his money when he diversifies his investments?

QUESTION: Warren in North Carolina wants to know if he should diversify his money into something other than real estate given the state of the economy. Dave reviews where he puts his money and suggests different options for Warren.

Dave's ANSWER: I invest in three things. The first is good growth stock mutual funds, and the stock market is going nuts after the election. It's basically dropping through the floor, so apparently Wall Street didn't like the election.

I also buy real estate that I pay cash for. I also own a business, and those are the three things I have money in, and I really don't diversify any more than that. By being in different pieces of real estate and several types of it, as well as being in different types of mutual funds, I'm diversified.

I'm doing very well with real estate today. The stock market is good, but it's pretty scary right now and we don't know what's going to happen.