Many of you hold economists in low esteem, and reasonably so if you judge them on their forecasting record. But they do have some useful advice to offer – and one piece in particular is underappreciated.
This is the idea that what matters is your portfolio as a whole, more than any part of it. Everything you are investing for – whether to finance lavish spending, achieve a secure retirement, leave money to your children or whatever – depends upon your overall wealth. So it’s this that matters.
Obvious as it seems, this has some implications that are often forgotten. Here are four.