Fair
Fair is in the eye of the beholder.
Starting Thursday, August 1, through Sunday, August 11, well over one million eyes will behold the spectacle that is the Wisconsin State Fair – the seventh most-attended state fair in the country.
What is the draw? There is something for everyone to do.
If you are a foodie, check out the Cool Ranch Doritos Pickle, the Deep-Fried Lemonade Bites, the Elvis Nachos, the Rise and Swine, or the special limited-edition flavors of cream puffs (only 1,924 served per day!). If you love animals, you can spend hours wandering through the barns to see horses, cows, pigs, sheep, chickens and rabbits. If you are a thrill-seeker, make your way to the midway for dizzying rides.
If you love music, stick around for the evening concerts. If you enjoy going downhill on burlap, the Giant Slide may be just what you need. Looking for something you never thought you really needed but suddenly need to buy, head to the Exposition Center for a potpourri of irresistible merchandise and services.
In summary, the fair attracts large crowds because it offers a little bit of everything for everyone. If you ask two fairgoers at the exit what their experience was like, you will likely get two very different answers.
Portfolio diversification works the same way. While not quite as delicious, thrilling, or smelly, there are hundreds of different options for creating a diversified portfolio. You may own any size company in any country in the world. You may lend money to governments or companies around the globe. You may invest in commodities, real estate, and other unique strategies. There is literally something for everyone.
Even with all of these choices available to them, traders have predominantly been standing in only one line since October – the Big Companies That Will Benefit from Artificial Intelligence attraction. It has been a hit.
Their attention span has been amazing thus far. However, human nature naturally loses interest in repetitive experiences. The first time you go down the Giant Slide is really exciting. The 112th time, not so much. At some unpredictable point in the future, traders will tire of the Artificial Intelligence attraction and find something else that is more exciting (or at least different).
Diversification means investing in asset classes which you may not instinctively appreciate or find exciting. If you are naturally a foodie, you may not appreciate walking through the swine barn from whence your pork sandwich cometh. If you are a thrill-seeker, you may not naturally sit through hours of music. While those experiences are an option, your instincts will direct you in a different direction – often to something new, exciting, or comfortable.
Unfortunately for those seeking the latest and greatest attraction, diversification is fairly boring. Diversification will never be your most favorite experience at the fair because it is the entirety of the fair. It is the attractions you loved and the ones you wish you would have skipped.
So, go to the fair over the next 10 days. Just be sure to diversify your experience to ensure you have a great mix of memories.
Quote of the week:
Barry Ritholtz: “The beauty of diversification is it’s about as close as you can get to a free lunch in investing.”
