Educational purpose: General information, not personalized financial, legal or tax advice.
Capital shall have a defined purpose
Money for near-term obligations should not be exposed to risks intended for distant goals.
Risk shall be judged by consequence
Volatility is only one risk. Permanent loss, forced selling, inflation, concentration and illiquidity may matter more.
Diversification shall be deliberate
Many holdings can still represent one narrow economic bet. Diversification should consider sector, geography, duration and credit exposure.
Costs shall be measured over time
Fees and taxes reduce what remains available for compounding.
Decisions shall follow written rules
Portfolio changes should arise from changes in goals or policy, not market excitement.