If you are like me then this scenario might have happened to you a time or two. When sitting down to one of Mom’s home cooked meals, and just as you start chewing on those first few bites, you think to yourself, “Mmmm this is good”. Well this was the case, as I was enjoying a hearty beef stew my Mother had prepared while I was back home visiting. This meal got me to thinking. What made the stew so good? After a little thought and a second bowl of stew, it dawned on me it was not one single extraordinary ingredient but the construction and combination of the ingredients together.I think when constructing a diversified portfolio you should approach it as you would in creating a savory stew. In creating a stew you would start with the basics of perhaps beef, potatoes, carrots and onions. Much the same is true as you would design a portfolio with some large caps, value stocks, small caps, international stocks and some fixed income and cash. Once you have the basic ingredients in place you might decide to carefully add in a little seasoning. While we all know the right amount of spice in our food can add to the depth of flavors enjoyed. So you too might want to sprinkle in other assets types into your portfolio to make it more robust. As we think of adding in oil, precious metals, real estate, collectibles and etc., please remember that a little bit can go a long way. As with the stew, if we add too much salt, it can make the overall stew unpalatable. And in the long run it can be bad for our health.
As stated earlier the magic flavor of the stew does not come from one secret ingredient, but the real magic is time. Once, all the ingredients are combined. Over time and heat the ingredients and flavors are melded together to form a complete meal. Again this is true of a properly diversified portfolio. Normally over the long haul it is not the performance of a single stock or fund that makes the portfolio a good one, but the combined group of assets working together to deliver the returns you expect.
If you need help in creating a diversified portfolio, contact Stalwart Financial Planning at (910) 867-8464. But if you need help making a hearty beef stew, it is better to follow tips from Mom because I’m not much of a cook.
Until next time and remember you do not have to have a fortune to start creating one!
Mom’s Savory Beef Stew
2 lbs. Stewing Beef
¼ Cup Oil
1 tbsp. Butter
Salt and Pepper
2 tbsp. Flour
2 C Beef stock
1 medium Onion
4 Potatoes – cubed (peel if desired)
3 Carrots
1 Bay leaf
2 Sprigs of thyme
Add oil to a large skillet and heat on medium high. In a separate container season the beef with salt and pepper and then coat beef with flour. Place coated beef into skillet and brown. Once the beef is browned add the onions and butter to the beef and stir occasionally for about 4 minutes. Next place browned beef/onion mixture and drippings into a stock pot along with potatoes, carrots, bay leaf and thyme. Add beef stock and stir thoroughly, cover and cook on medium-low heat for 1 hour 30 minutes or until all ingredients are to desired tenderness.
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Author
Isaac is a Fee-Only (no products sold) Certified Financial Planner® Practitioner. Isaac founded Stalwart Financial Planning with offices in Fayetteville NC and Durham NC. Isaac provides comprehensive planning and investment management services to individuals from all walks of life. Isaac can be reached by phone at 910-867-8464, or by email (iallen@StalwartPlanning.com). Visit him at Stawart Financial Planning www.StalwartPlanning.com.