How important is geographical diversification when investing?

We all grew up hearing the old saying “never put all your eggs in one basket.” Back in the day, I would hide my little savings all over the house, and even in the backyard, just in case my siblings found it. I knew there would be a low chance of them finding all of my “money stash” and my savings wouldn’t all be gone. Well, it worked! My complete money stash was never fully discovered and I was able to have a nice amount of money in savings by the time I was a teenager.

Never put all your eggs in one basket! This is true for all things in life, whether it be relationships, careers, health and most certainly it applies for your money. If you want to be wealthy and create financial freedom for yourself and your family then your money needs to be put into multiple “baskets.” You need your daily transactional savings account, an emergency fund, and most importantly, your investment portfolios.

Now as you set out to build your investment portfolio, it is good to start with what you know. This means choosing solid companies with great fundamentals. These are companies that you have grown up seeing and these are the same companies that you will leave on this earth. They are reputable companies and they make the most fantastic domestic investments. These companies form what will be your core portfolio – your first investment basket.

The next step as you seek to grow your wealth will be to create your second investment basket. The secret sauce in doing this successfully is a concept called geographic diversification. Geographic diversification is a drastically underrated investing strategy that reduces risk and creates opportunities. You absolutely need this in order to be wealthy.

Diversifying your investments from a geographical perspective, means that your investment portfolio is spread across many different regions in the world in order to reduce risk and improve returns. Another amazing benefit to a geographic diversification of assets has to do with the way it allows you to mitigate risk by taking advantage of more stable economies and currencies elsewhere in the world. I show people how to create an international portfolio and to look at investing especially in the US stock market given that it is a very liquid market with access to many more types of investment securities.

In the US, you are able to invest in options, futures, precious metals, commodities and the ever popular cryptocurrency. This is one of the best ways to generate the peace of mind that only comes with knowing you’ve done your part in creating financial freedom, for both current and future generations.

My hope is that this article helps you to rethink and reposition your investment portfolio to withstand the uncertainty that the future brings. We know for sure from COVID that nothing in life is certain; especially our finances.

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  1. Mark September 12, 2022 at 5:44 am

    Thanks for your blog, nice to read. Do not stop.