AWM Insights #16: Should COVID-19 Change Our Investment Decisions?

With a spike in Coronavirus cases around the country, we continue to see multiple industries getting shaken including airlines, cruise ships, and travel destinations. Alternatively, we see the top tech companies (Google, Facebook, Microsoft, Apple, and Amazon) combined currently represent more than 20% of the S&P 500, which makes sense with more people than ever relying on technology to work and stay connected. As we continue to allocate investments, many are wondering if we should try to make concentrated bets on how the Coronavirus might continue to impact different parts of the economy.

However, the main thing to keep in mind is that no one has a crystal ball - no one can see the future. So, typically the best way to prepare for times like these is diversification of your allocations. We've seen throughout history similar trends with different industries rising and falling, and investors who aren't diversified can unknowingly expose themselves to more risk than they intend.

In this episode, Erik & Brandon discuss this idea and address topics like:

What is the home bias?How diversification can protect against unintended risk and help to capture opportunityWhat can we learn from history and data in terms of portfolio diversification?What is success?How do we most effectively grow our wealth over the long-term?