In the stock market, you are playing on a world stage with public companies. Therefore, as much as you are insulated from local events, you are exposed to national and worldwide ones.

Every single country that is a world player, investors are susceptible to their actions. The actions of the central bank in England and the EU are likely affecting your investments right now if you are investing in the stock market. Investors are completely susceptible to foreign countries actions. That’s a wild thought.

Even if you are diversified into many industries, but they are all publicly traded, you are not diversified in the scope. The scope is, by default, worldwide; and generally when the stock market goes substantially down, all of it goes to down to varying degrees.

The problem is if the stock market takes a nose dive similar to that of 2008 (and it’s a real possibility), life doesn’t wait 10 years for another correction. It’s a great philosophy in theory, but people don’t live forever, retirement doesn’t wait until its a convenient time for the stock market to perform well, and real life is different than a theory. Life doesn’t give you decades at a time to craft the perfect retirement; heck, none of us are even promised tomorrow. We can be wise with planning but we can’t put all of our trust in a strategy that demands a decade in order for it to work out.

Life’s needs and events do not submit to the directives of the stock market. Rather, the stock market responds to world events. Rather than independently following each public companies decisions, the stock market follows what the central banks do, because the central markets are controlled by the actions of the central banks. ( Nor has the market made a promise to always obey traditionally understood wisdom when it comes to cycles.)

To be truly diversified you must have localized investments that are insulated from world events, and must have investments that are insulated from local events; as well as a few different industries within the worldwide and localized scopes. If a disproportionate amount of your investments are publicly traded, that is not diversified.

And like with every wise principle, the Bible called it out first:

Ecclesiastes 11:2:

“Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”

Boron Capital holds different localized regions within the U.S., is expanding into international markets, and uniquely serves many industries: the oil and gas market, the corporate market, the luxury market, mobile home housing, and the self-storage market.

It’s of paramount important to start looking for ways to diversify right now.

A nice balance of logic and true diversification will do you well.