Your Investments: Sukkot unity and your portfolio

It’s interesting that families are referred to as a unit as well. You have individuals who are part of a larger whole. Each one brings their own strengths and weaknesses to the unit.

The TMTI Summit at the Tel Aviv Stock Exchange (photo credit: DAVID DIMOLFETTA)
The TMTI Summit at the Tel Aviv Stock Exchange
(photo credit: DAVID DIMOLFETTA)
I’ve performed in China, France, New Delhi and Indianapolis, and everybody just allows themselves to go at it and have a good time. I think that’s what I’m doing through music. It’s not about “I’m from here and you’re from there.” It’s about unity. – Ricky Martin
It’s come to the point in my articles when my children actually ask if I can write about them. As I sat down to write, my younger son came over to me and said, “Can you write about me this week?” I declined and he walked away dejected. Being Chol Hamoed Sukkot, the theme of unity takes center stage, and as such how could I only write about one child and leave out the rest!
As a central element of the Sukkot holiday is unity, we take the lulav along with the other three species and hold them together as one unit and make the blessing and shake them. Each specie has its own specialness and we take all those unique qualities and bring them together as one. During both the First and Second Temple periods, every seven years the entire nation – men, women and children – came together for the hakel ceremony to increase Torah observance and study, and foster an environment of fear of God. In many ways, this was the ultimate expression of national unity.
It’s interesting that families are referred to as a unit as well. You have individuals who are part of a larger whole. Each one brings their own strengths and weaknesses to the unit.
Regarding family and Sukkot, Rabbi Moshe Bogomilsky writes, “That the mitzvah of sukkah represents unity is obvious from the fact that many families may eat together in the same sukkah. The Gemara (Sukkah 27b) says that, ‘re’uyim kol Yisrael leisheiv besukkah achat’ – ‘All of Israel are fit to sit in one sukkah’ – which means that unlike other mitzvot (e.g. four species) where each one must have his own object, one can build a sukkah and let everyone use it to properly fulfill the mitzvah of dwelling in a sukkah. Thus, sukkah is a mitzvah through which Klal Yisrael becomes united.”
When it comes to investing money, unity plays a big role, except that there is another term for it. It’s called diversification.
Diversification
Diversification is an investment technique that uses many varied investments within one portfolio. According to diversification theory, a portfolio of different kinds of investments will, on average, yield higher returns and pose a lower risk than any single individual investment. Much like the Four Species, or a family, by bringing together multiple assets that have their own uniqueness, you end up with a complete unit. Diversification tries to smooth out volatility in a portfolio caused by market, interest rate, currency and geopolitical risks. In layman’s terms, don’t put all your eggs in one basket.
Although you may not get rich quickly with a diversified portfolio, over the long term you may continue to build up the value of your assets.
Problem
When it comes to diversification, many people ask why one should invest in something that you either don’t like or don’t think will appreciate in value. If an investor doesn’t think the investment will go up, what’s the point of owning it? The implication of the question is that one should only invest in something that he thinks will make money now.
What’s the answer?
Just because a person doesn’t like something or doesn’t think an investment will appreciate, this doesn’t necessarily mean that is what will actually happen. Diversification is about lowering risk, and trying to not just preserve principal, but to grow it as well.
For most investors, a diversified portfolio makes sense. Most investors have neither the time nor know-how to successfully get rich by investing in a few stocks. By investing in a diversified portfolio you can both lower your risk and enhance your returns. Sounds like a good deal. Building wealth takes time. In today’s culture of instant gratification, we look to get rich quick by investing all our money in a few “hot stocks.” Unfortunately for most who invest that way, the opposite occurs and they end up losing much of their money.
Chag Sameach!
The information contained in this article reflects the opinion of the author and not necessarily the opinion of Portfolio Resources Group, Inc., or its affiliates.
The writer is author of the book Retirement GPS: How to Navigate Your Way to A Secure Financial Future with Global Investing (McGraw-Hill), and is a licensed financial professional both in the United States and Israel, and helps people who open investment accounts in the United States. Securities are offered through Portfolio Resources Group, Inc. (www.prginc.net). Member FINRA, SIPC, MSRB, FSI. For more information, call (02) 624-0995 visit www.aaronkatsman.com or email [email protected]