The Diversity Trinity® is a concept that I came up with to help people understand how to diversify their investments. Think of a triangle with three sides.

In the middle, you have diversity. You also have three points. Let’s say you’re a real estate investor. The first point is “in,” so whatever real estate you have your money in.

The second point is “within,” or what other investments you have in addition to that, like multiple houses. The third point of the triangle is “out.” You should also have your money in something besides real estate to be diversified.Another example could be mutual funds. A lot of people come in with retail designs from the big guys and 60% of their portfolio will be large-cap growth stocks. Let’s say you own Coca-Cola stock. You have your “in” already, now you need to find your “within,” or other large-cap growth stocks. Your “out” would be something outside of large-cap growth stocks, like small-cap growth stocks.

In, within, and out. Remember those three points. We see too many people focusing on one specific investment they love and they don’t diversify. That’s a big mistake. It’s good to believe in something, but you don’t want all your eggs in one basket. We always encourage diversification, and this is one way to determine that.

This is a simple way to tell if your investments are diversified. You can become over-diversified, but we’ll cover that at a later time. For now, if you have any questions, don’t hesitate to give me a call or send me an email. I would love to hear from you.

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