CATCHPHRASE INVESTING

The financial media is drawn to catchphrases, acronyms, and buzzwords that can be sold as the new thing. FAANG (Facebook, Apple, Amazon, Netflix, and Google) is the latest of these. But does this constitute an investment strategy?

Jim Parker says that investment trends tend to come and go. So should you reweigh your portfolio around these tech names or is diversifying the way? Another way to to see the issue is accepting that it is difficult to pick winning sectors but that does not mean you should exclude these stocks. You can still own them, but you do so by casting a much wider net. This way of diversifying reduces the risk of placing too much on one sector, therefore improving the odds of holding onto the best performers.

Read exactly what Jim Parker, Vice President of Dimensional Fund Advisors has to say by clicking below.