Building an excellent Portfolio is a lot like making a great pot of chicken soup. Sound ridiculous? Well, hear me out and then decide. You see, when you make a great pot of chicken soup the individual ingredients really make a difference. If, For example, you go to a store that has fantastic vegetables but their chicken is sub-par you will have to go to another store to get the chicken. If your fave ingredient is at yet a third store you’ll have to go there also if you want the end-result to be as good as it can be.
The last thing you would want to do, if you really wanted your chicken soup to be excellent, would be to buy all of the ingredients in the same store, especially if some of them were not up to your liking. You’d want to get the best ingredients, from all 3 stores if you really wanted to have the best chicken soup you could have. The best ingredients are not always to be found all together at the same grocery store, and the best investments are sometimes not all together at one location.
This applies to your portfolio and your retirement investing as well. If one company has one investment opportunity that looks good and a number of them that don’t you should choose the good one only and leave the rest. What you want to do is pick and choose the best selections from each source that you have access to and use them to build an all-around strong, multi-faceted portfolio. Do that with all of the investment firms and even your employer if you want your portfolio, your ‘investment soup’ to be as delicious, scratch that, as strong as it can be.
The best thing about putting together your portfolios like you do a steaming pot of chicken soup is that, unlike the soup, the ‘ingredients’ in your portfolio won’t all be in the same ‘pot’ but be spread out in different accounts. This may seem disadvantageous but the fact is that the mix of investments taken from different sources will be more coherent than ever and perform better than if you put all of your investment and retirement ‘eggs’ into one basket. (Which reminds us about the old question of the chicken and the egg but we digress.)
So when it comes to creating an excellent, well rounded and diverse portfolio pretend you’re making some chicken soup for the whole family and make sure that your ‘ingredients’ are the very best that they can be. That way, when retirement finally arrives, you’ll be able to eat more than just chicken soup every night for dinner.