To Diversify or Not Diversify – #110

Less than Two Weeks

In less than two weeks I’ll be kicking off the 2nd annual Creator Economy Expo at the Huntington Convention Center in Cleveland, Ohio. If you haven’t registered by now, I’m sure you can’t make it…but…by far, this is the best speaking lineup we’ve put together in my 20+ years of doing events.

Over 40 creators. More than 30 hours of teaching content creators how to build audiences and drive revenue. If you create and distribute content as part of your business, this is the best I can do.

If you want access to all the videos from the event, you can get them for $295 by using coupon code JPVIP using this link. The videos will be available two weeks after the event ends.

If you’d still like a chance to come but need some financial help, email me and make your case. I’ll do the best I can. Thanks!


I watched the movie Air this week starring Matt Damon and Ben Affleck.

It’s the story of how Nike (who at that time was last in market share for basketball shoes) signed Michael Jordan.

Good movie (not great) … but an amazing story.

This part interested me.

In 1984, Nike set aside $250,000 to sign three or four players from the NBA draft. Instead, Sonny Vaccaro from Nike convinced CEO and Founder Phil Knight to put it all on one amazing player (Jordan).

The sensible decision would be to diversify the investment.

The decision with huge upside would be to bet it all on the best player.

Nike was hoping for $3 million dollars in sales that first year with Jordan. They did $162 million.

In 1984 Nike had 17 percent of the shoe market. Today it’s 90 percent.

In just the last five years the Jordan brand has brought in $20 billion dollars in sales for Nike.

I believe the same concept goes for content creation. So many content creators and marketers diversify and spend minimal time on five, six, seven platforms and make no impact. The better decision is to go “all in” on one or two (like Nike did).

Focus almost always wins. NOTE: I say “almost” because I’m sure someone has been successful creating and distributing content everywhere at once…but I just don’t have an example of that.

Bringing Into Existence

Lin-Manuel Miranda and John Kander were on the Late Show with Stephen Colbert last week. There’s a three minute clip that I think every content creator should watch.

Miranda and Kander are working with each other on a new musical called New York, New York and they’re talking about how they would be chatting and then an hour would go by and they just created something.

Miranda says they are working, and then something begins to happen, and then says “This Exists Now.” Really powerful scene on how two creators develop art. Then Kander goes on and says that one of the great things about making stuff is that something is now there that wasn’t there before.

I watched it a couple times and felt blessed about the opportunity to create things that were not there before…maybe with the ability to at least positively affect one person with what I do.

Thanks to subscriber Ruth Carter for sending me this clip.

The Perfect Investment Strategy?

Last year I was asked to write an article about how to invest your proceeds after selling your company. Here is the full article, but I thought I’d share a portion of how I think about investing for the long term. Because it has to be stated, this is NOT investment advice of any kind.

A quick note: In the previous section on Air I recommend NOT diversifying. This is business advice and I believe it’s correct. Below is investment information on how not to LOSE what you already have. In this case, I believe in diversification. A person “could” go all in on one thing (say crypto) and be successful (or lose it all), but with that strategy I cannot sleep at night. And my number one goal for investing is to be able to sleep at night. You’ll see.

Let’s start with 100 percent. That’s all the money you have in the world.

The first 25 percent could look like this:

– 10 percent in cash
– 10 percent in real estate
– five percent for charity

Before we get to the remaining 75 percent (this is the amount of money we are looking to grow over time), there are a few things to consider.

First, you should allocate this money so that you can sleep at night. If you are constantly worried about this pot or checking stock prices all the time, there is a problem.

Second, I have a good handle on investments, but I know enough to know that I don’t know everything.

So, I decided to take half of this pot and manage it myself (through a self-service broker like Fidelity or TD Ameritrade) and take the other half and have it professionally managed.

For the professionally managed part, I decided on a firm that charged an annual management fee on the total amount managed (say 1 percent), rather than choosing an advisor that gets paid from what they invest in for you (loaded mutual funds or other investments).

This way, I know exactly what I’m paying, and, if at any time I want to remove the investment advisor, it’s already in an account that I can see and manage.

If you go with a traditional investment advisor, often they hold the money/assets in their own accounts and make all the trades.

I like it better when the advisor does not own or control the trading platform.

My Investing Formula

Now, of the 75 percent cash you have remaining, I like this formula:

45 percent US stocks with an equal distribution of small-cap, mid-cap, and large-cap stocks, as well as a division by sector (technology, healthcare, etc.). If you are more aggressive, you can lean toward the tech and healthcare sectors rather than energy or consumer staples. If you feel comfortable owning particular stocks that you understand, that’s great, but ETFs make it simple and can get you the diversification you need.

The remaining 30 percent looks like this:

– 10 percent international stock holdings
– 15 percent bonds; a mixture of US, international, and corporate bonds
– Five percent alternative assets

For the five percent alternative, I like to see a mixture of hedge funds and cryptocurrencies. For crypto, I like Bitcoin, followed by ETH, as well as several NFT holdings (I would put this into the art/collectibles category).

Most people don’t realize that the best-performing sector over the last 50 years is high-end art. I believe the future of this is digital, thus non-fungible tokens.

This is a bit more advanced than most, so if you are a little skittish stick with Bitcoin and ETH and you can skip the NFTs. Even though crypto has been HIGHLY volatile, I am still a fan of this strategy.

In This Case, Diversity Wins

If you execute this correctly, you should have created a remarkably diverse portfolio.

And that’s what we want…diversification.

Diversification might not necessarily give you huge returns, but it does ensure that you can sleep at night and it will grow your hard-earned dollars over time.

In closing, let’s review:

– US Stock Holdings. Cap and sector diversified – 45 percent
– Bonds, diversified by location and structure – 15 percent
– International Stock Holdings, diversified by country/region – 10 percent
– Cash/cash equivalents – 10 percent
– Real estate – 10 percent
– Charity – 5 percent
– Hedge Funds – 2.5 percent
– Crypto/NFTs – 2.5 percent

Again, as a final note; I am not a qualified investment advisor. I am speaking only from my personal experience. Please seek out qualified help when you are ready.

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