Is Owning the S&P 500 Enough Diversification?

The S&P 500 is an index (collection) of 500 broadly traded large-cap stocks. If your portfolio includes it, will you be properly diversified? Doug explains why even though historically the S&P 500 has had positive returns over long periods of time, past performance can’t predict future results. Moreover, he explains why most people are mistaken in their understanding of how diversified – or not – the index actually is. Listen for tips on how to make sure your portfolio is well-diversified. Sometimes the best way to diversify is getting outside help. Watch here to see what type of money managers can help diversify your portfolio.

Jill Schlesinger, CFP® and business analyst at CBS news, joins Doug to explore whether today’s economic landscape is significantly different than it was in the past. If so, should retirement planning and investment plans reflect the new outlook? Jill believes that the global recession taught investors how to look at the future, and we shouldn’t look for a “best-case” scenario, but for the most reasonable scenario. She asserts that the best protection for all investors (including Americans living abroad) is a broadly diversified portfolio. Jill gives advice on what you should do if you think the market is particularly volatile. If you anticipate a big market crash, what move should you make? Listen to Jill and Doug’s discussion to find out when a healthy dose of cynicism pay off, and how to prevent self-inflicted market wounds. Learn more from Jill by listening to her podcast, Better Off, and going to her website jillonmoney.com. Follow her on twitter @jillonmoney If you’re not already receiving updates on new episodes, sign up now, and as a special bonus, receive Doug’s free ebook The Retirement Planning Book.