Episode 249: What ‘The Psychology of Money’ Gets Wrong About Portfolio Diversification

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Are you really diversified—or just following one investing strategy and hoping it works out?

In this episode, we unpack what The Psychology of Money gets wrong about portfolio diversification and why many investors misunderstand what diversification actually means. While many popular investing books recommend keeping things simple with a single strategy, real-world investing often requires more flexibility.

If you’ve ever felt torn between keeping your portfolio simple and optimizing for better results, this conversation will resonate. We explore why building wealth is not just about choosing the “best” asset class, but about choosing a strategy you can actually stick with through market swings, uncertainty, and changing goals.

You’ll hear a candid discussion about the emotional side of investing, the tension between growth and income, and why true diversification may involve more than just owning different assets—it may require diversifying strategies as well.

In this episode, you’ll learn:

• Why diversification is not only about asset classes, but also about investment strategies—and how that shift can change the way you build wealth.

   

• How to choose an investing approach that matches your personality, risk tolerance, and long-term goals so you can stay consistent.

   

• Why balancing net worth growth, cash flow, and flexibility can help you create more optionality as your financial life evolves.

Press play to rethink diversification and start building a wealth strategy you can actually feel confident following.

Resources:

• Ready to take a deep dive and learn how to generate personal tax free cash flow from your corporation? Enroll in our FREE masterclass here. 
• Book a Discovery Call with Kyle to review your corporate (or personal) wealth strategy to help you overcome your current struggle and take the next step in your Canadian Wealth Building Journey!
• Discover which phase of wealth creation you are in. Take our quick assessment and you’ll receive a custom wealth-building pathway that matches your phase and learn our CRA compliant tax optimized strategies. Take that assessment here.
• Dig into our Ultimate Investment Book List
• Follow/Connect with us on social media for daily posts and conversations about business, finance, and investment on LinkedIn, Instagram, Facebook [Kyle’s Profile, Our Business Page], TikTok and TwitterX. 
  

Calling All Canadian Incorporated Business Owners & Investors:

Consider reaching out to Kyle if you’ve been…

• …taking a salary with a goal of stuffing RRSPs;
• …investing inside your corporation without a passive income tax minimization strategy;
• …letting a large sum of liquid assets sit in low interest earning savings accounts;
• …investing corporate dollars into GICs, dividend stocks/funds, or other investments attracting cordporate passive income taxes at greater than 50%; or,
• …wondering whether your current corporate wealth management strategy is optimal for your specific situation.

For Canadian entrepreneurs and business owners, true diversification means more than simple asset class diversification or basic portfolio diversification—it means building a Canadian wealth plan that combines smart diversification strategies, tax-efficient investing, and a repeatable investing process aligned with your long-term financial vision. Whether you are weighing real estate investing Canada opportunities, comparing real estate investing vs index funds, optimizing RRSP room, or deciding on salary vs dividends Canada, the goal is to balance net worth vs cash flow through income investing, dividend investing, passive income planning, and corporation investment strategies that support both personal and corporate wealth planning. By using financial buckets, an investment bucket strategy, and financial systems for entrepreneurs, you can create wealth building strategies Canada business owners can actually sustain—ones that support business owner tax savings, personal vs corporate tax planning, capital gains strategy, corporate structure optimization, estate planning Canada, legacy planning Canada, and early retirement strategy goals. This is the kind of practical, modest lifestyle wealth thinking behind Canadian Wealth Secrets: helping listeners pursue financial freedom Canada, financial independence Canada, and building long-term wealth Canada with clearer financial vision setting, stronger retirement planning tools, and more confident Canadian tax strategies.

Transcript:

Jon Orr: I’m gonna ask you this question, Kyle. You know, one of my hobbies is I try to get my hands on as many different resources, many different learning opportunities in the world of finance, in the world of personal finance. So you’ve heard us talk about different books we’ve read, different maybe courses we’ve tried or different strategies. We recently talked a few weeks ago about the simple path to wealth from J.L. Collins. We definitely talked about Morgan Housel’s book, The Psychology of Money. We’ve leaned on recently Stephen Bavaria and Stephen Stalgut on some income producing assets. And basically we’re always trying to figure out the moves.

Jon Orr: But let me ask you this because most of those books — J.L. Collins, Ramit Sethi, Morgan Housel — they’re authors, they’re writing personal wealth building books and they’re saying just invest in the stock market, just invest in the S&P 500 or a global index fund. You’re gonna be fine. Now, here’s the question to you. Why do you not do that? Like you personally. Like all of they are saying is like, you’re going to be fine over the course of 20 to 30 years. And people who have been listening to this show for a while probably go, I know why Kyle doesn’t do that, but let’s get to the heart of it. Like tell me what is really holding you back or what is it that in a way pushes you away from that strategy?

Kyle Pearce: Yeah, I think honestly, one of the main ones is that I am by nature an optimizer, but I think if I dig deeper, I’m actually very emotional when it comes to money. And I think I’ve talked about it on the show before, right? Where we talk about the seven primal questions. Great book — the author articulates that everybody has like this innate built-in sort of fear, and mine is financial. It is am I safe, but not from a violence perspective — it’s like am I financially safe.

Kyle Pearce: And it’s something that I’ve had, I would argue, like you know, I was born with it. I had a single mom for my early years, you know, she did a great job. It’s not like we couldn’t put food on the table or anything like that, but early in that journey I saw through her what that looked like to make sure you were a good steward of whatever money you had. And all the way along I’ve always had this sort of not wanting to lose money as sort of an aspect that I have in the back, which makes me very emotional.

Kyle Pearce: And therefore, if I pick a strategy like just dollar cost averaging into low cost ETFs, if that was my only strategy, even though all the research — I’m very rational when I’m doing the research — emotionally something for me is like, I look at it and go, well, it doesn’t make sense to leave all your money and just watch it drop 30%, even though in the long run, if I don’t need that money right now, I should be 100% fine with it.

Kyle Pearce: So I started my journey with real estate. And I think one of the main reasons was that I trusted it the most. I could knock on the door. I own property. The reality is that property is scarce and it will remain a scarce asset unless we populate other planets or something along those lines. It’s the asset class for me that felt the best. And I think from an emotional standpoint, because I wasn’t watching a ticker on the value of the property, I just felt like I could see the money come in. I send the money out that I need to send to the mortgage, any of those expenses. And just knowing that I owned more and more of that property was something that allowed me to follow a process to get the wheels turning.

Kyle Pearce: And actually this is kind of a nice segue into what we’re gonna talk about today, which is what is true diversification and what does that trajectory look like? Because I’m gonna argue that for most people, we don’t actually want to start with true diversification because it’s a really hard thing to do. We wanna start with doing what is easiest for you. And as you start building that pile, that’s when we start looking at other elements of diversification to decide where do I go next? And do I feel okay with doing certain things that maybe I wouldn’t have felt okay doing right away at the beginning?

Kyle Pearce: And for me, that’s been focusing more heavily in recent years on building up my paper asset portfolio, my public market portfolio, those types of assets. Because I stuck to a process in real estate and I’m happy and comfortable with what I’ve built there, but I now recognize that that one strategy isn’t diversified enough from a strategy perspective over the long term as we build our wealth. So I’m now sort of backing up and saying, okay, how do I layer in to other asset classes? And more specifically, how do I layer into other strategies for wealth building so that I’m not a single strategy guy?

Kyle Pearce: And there’s no harm in that if you’re that person listening to this podcast — it might work perfect for you and that’s awesome. But for someone like myself, you’ve got to make sure that whatever the strategy is, whatever the asset is, that by picking that asset and that strategy, you are able to actually do whatever is needed on a repeat basis. So for me, it was buy more property, buy more property, buy more property. If that’s what you need to do to get going, you should do it. And then once that starts building and you build more confidence and you’re comfortable with where you’re standing, then you start to zoom out a little bit and start to go, what else can I do here? What else can I learn about assets that maybe I haven’t been considering to date? It doesn’t make you wrong about what you did already. It’s how do I take some of these other ideas to help fill maybe holes in your strategy that might become more apparent over time.

Jon Orr: Yeah. You know, you mentioned true diversification and you mentioned a few different things about it. And I think what goes along with most people’s thinking is that diversification is about asset classes. Because someone could argue — like Ramit Sethi or J.L. Collins — they’ll argue that they are diversified because they’re invested in the S&P 500 or a Vanguard Total Market Index Fund, which basically says I’m investing in the world’s businesses, so especially if it’s global, I am fully diversified.

Jon Orr: What you’re saying is there’s more than just that. That’s a paper asset that’s investing in businesses across the world. You’re saying, I invested in real estate, a different asset class. And lots of people listening to this show understand that type of diversification — investing in businesses, private equity, credit, or real estate. All of these are different types of asset classes.

Jon Orr: But you mentioned, going back to true diversification, that you also realized that diversifying in strategy was important to you. And you said there’s nothing wrong with the person who is all in on one strategy. If you go back to those individuals who wrote those books, millions of people follow those strategies and they’re saying, my strategy is to just keep dollar cost averaging into index funds and that will win out over time. I think my fundamental belief is that that will — like any strategy you choose for your retirement portfolio, for your investment journey, whatever you decide is going to win out as long as you are consistent with that strategy.

Jon Orr: So for example, dollar cost averaging over the long term is gonna win out in a way no matter what asset class you really pick. That’s the important component about a strategy. If you want to be an options trader and trade crypto, it’s going to win out as long as you’re consistent with that strategy for a long period of time. If you want to go all in on real estate and be consistent with building and reinvesting and using the strategies around risk, it’s gonna win out as long as you’re consistent around it. These are the fundamental things I believe about strategy.

Jon Orr: I think what you’re doing, what we typically do, is going back to your safety idea — I could pick a strategy and I could commit to it and I know that will win out over time, but I don’t wanna be that person 20 years from now who goes, geez, I did well, but I could have done a little better or a significant amount better if I had chosen that strategy over there. Which is maybe focusing more on dividend investing. And it’s like, wait a minute, I don’t want to be that person.

Jon Orr: And so I think what you’re saying in terms of diversification is you not only want to diversify in asset classes, but you also want to diversify in strategy. Because in a way, what you’re trying to do is create and almost do like A-B testing. You want to test on a consistent basis what is the strategy that helps me achieve my goals now and my future goals, which I know will change down the road.

Jon Orr: But I wanna be in a position that moves flexibly when I can, and I’m gonna commit — this is the important part — to the process of strengthening my strategies and then also being consistent with moving strategies when the time is right. So I think one of the things I know about you and I’ve learned from you over the years is we constantly have a portion of our time, yes I’m gonna commit to this strategy and I’m gonna be doing this on a regular basis from my retirement funds. This is what we believe now, but I have a strong belief there, but I’m gonna loosely hold it.

Jon Orr: And I’m gonna loosely hold it because I’m gonna learn over here on the side. I have like my genius time, or my 10% time, which is basically saying, some of the time I’m gonna learn about new strategies or new opportunities. And then what I’m gonna be doing is if I get strong on understanding those, I reserve the right — because I have strong beliefs, but I’m gonna loosely hold them — to say, I’m now going to pivot some of my strategy away from this strategy and move this new strategy in to either replace it or add to it.

Jon Orr: And I’m gonna track that and continue with that consistently over time. And then 20 years from now, what I know is true is that our strategies will be consistent and the system we’re developing about choosing strategies is gonna be consistent, but the strategies I use 20 years from now might not be the strategies I do today. And what we’re really trying to do is just get better at choosing the right strategy so we can sleep better at night, be consistent with our goals, and help us achieve our goals.

Jon Orr: So that’s two of, I think, some of the three different diversification plays that we are talking about. Asset classes you already touched on, but then strategy diversification is important. And what we’ll also do a little bit later in the episode — I know you want to address something that I’ve just said — but we’ll talk about also giving everybody a glimpse of what the strategies we’re using right now, provided we reserve the right to change our strong beliefs down the road.

Kyle Pearce: I love that approach and I think it articulates something important. And I think if we rewind even to episode one of this podcast — that’s only a handful of years ago, right — I feel like even then we wouldn’t have been able to articulate this because I don’t think that we were as open as we are now.

Jon Orr: We were a real estate podcast.

Kyle Pearce: Yeah, we were really, really heavy into what we had been doing to date mostly. And we did have some paper assets, but they were sort of on the side burner. It wasn’t something that we were really focusing a lot of time and effort on. And over time since then, we’ve transitioned quite a bit. And a lot of times it happens because of all the clients that we chat with. So a lot of the Canadian Wealth Secrets community — I’m on calls most of every day during the week, and I’m chatting with all kinds of different people with all kinds of different strategies. And you can see where it’s working really well for some people, where maybe it’s not working well for some people, but then also the biggest challenges that they run into along the way.

Kyle Pearce: And I think one of the biggest things that you’re articulating is, again, as a start, you need to get started with something. And we would argue that you don’t wanna be diversified in strategy when you’re getting started because then it’s too distracting. Like there’s just too much. You’re like, should I do this? Should I do that? You get into analysis paralysis. So you just gotta get in. And it’s almost like the one that feels easiest to you — I don’t mean easy like you’re gonna be amazing at it, I’m talking the one that feels like the natural fit for you is probably the right fit for you.

Kyle Pearce: So whether that means putting it in a high yield savings account because that’s what feels good for you — don’t shame yourself, that might be where those dollars should start and you need to accumulate them. Because remember, it’s a volume game, especially early in the journey. Whether that first $100,000, whether you did this or you did that — I mean, we can put it in something speculative, but it could also be worth like nothing if you speculate. So if you’re picking a known strategy and you’re going all in on that strategy to start, that is so important.

Kyle Pearce: And then as you grow and learn, you’re gonna find things that you’re liking about it and you’re gonna find the things that maybe you don’t. Because the two big things that I find — and there are others — but the two big ones are gonna be growing for net worth or growing for income. And I think when we are in our working years, the vast majority of us are growing for net worth. We want to get that net worth on paper to grow. It’s not a bad thing because remember we can turn net worth into cash if we need to, but we don’t need to for a very long period of time. So we have the time on our side to figure that part out.

Kyle Pearce: But the part that I noticed with all the clients that I run into, and I notice it for myself, is that you and I, John, are like in this state of wanting to feel confident that we could just walk away at any point from doing any other income producing activities if we wanted to. We love what we do, so we don’t have plans to do it. But we do wanna feel that, where we go, we could just walk away.

Kyle Pearce: And I’ll argue that if I’m all real estate, because I’m in leveraged real estate, growing my net worth trying to juice those returns over time, that puts me in a spot where it’s possible, but I need to refinance for that money or I need to sell. And that is what’s got us sort of diversifying in terms of the asset classes that we want to be in, but then also in the asset strategies. Because I heard this really interesting quote — I don’t know who created it, but I love it — equity is great for fueling the ego, but cash flow is the only thing that can fuel your yacht.

Kyle Pearce: That quote hits you and it should hit you, because it’s like, it’s great if you have all of this equity. And you know, if you’re a high net worth individual in Canada, sure, you could completely live off of debt, but there’s problems associated with that, right? There’s challenges, there’s hassles involved, underwriting and margin calls, like all of these things. So the reality is that we want to have a diverse strategy where we could say, I do want to continue growing my net worth, and then as I live off of that pile, I would love it if that pile could actually continue growing — probably at a slower pace — while I’m living off of it. That’s the cashflow part, and feeling confident about it.

Kyle Pearce: So I’m kind of getting the win-win there, but it’s really hard to do if you start with one strategy and you never diversify from that strategy as you grow. You hit the $100,000 mark and you’re like, okay, it’s fine. That strategy is great. You even hit the million dollar mark — that one strategy could be great, but eventually at some point, you’re gonna wanna start going, I should probably be diversifying out of this one strategy to potentially another strategy or multiple strategies over time so that you have all the optionality. We use that word all the time on this podcast — so that you can benefit from those multiple strategies, but then you also have a lot of the optionality to decide what that looks like and sounds like.

Jon Orr: Well, let me say this because I think what’s important here is if the strategy you currently have — which means if you’re all in on the index fund investing approach and that’s the asset class, you think you’re diversifying across businesses, you’re optimizing your strategy for capital appreciation — you’re hoping, you’re betting, that the markets are going to go up and you’re going to sell shares down the road, which means your working capital is going to decrease. You’re going to trim off your working capital inside this asset class to fuel your retirement.

Jon Orr: If that strategy helps you achieve your goals and you are completely happy, then there is no need to do anything different. None at all. I think what you’re saying is that part of the pivot in the last number of years is saying, I don’t really want that to be my strategy because I don’t, in a way, want to see that capital going down every year. I don’t want to be in a position where I have to trim capital to live.

Jon Orr: My real estate portfolio — I never really had to think about that. I could live off cash flow if I had enough properties to make that work. And you’re saying, I could recreate that in terms of using an asset class in the market if I could have that cash flow and go, I’m gonna live off the cash flow. I’m never gonna have to really trim to do that. And that’s a new strategy that you’re saying is important for you — to help you achieve your goals, to help you sleep better at night, to help you come to terms with how do I want to be positioned 20, 30 years from now.

Jon Orr: You’re going to be really looking forward to seeing that cashflow hit your bank account every single month, because that’s going to help you cover all your bills, and your capital allocations are still going to grow. And I think that’s one of the strategies that we’re pivoting into — thinking specifically about how do I, and what asset classes can we use to move towards what Steven Bavaria calls an income factory? Which is like, let’s look at how do I produce income from my assets as a primary driver of my return instead of the capital appreciation of my return. And that’s a strategy you’re saying is important for you because it helps you achieve your goals.

Kyle Pearce: Right. And I would say too, you know, like that real estate investor — we recorded an episode recently — has a large net worth, over $7 million, but all locked up in real estate. And for that individual, it was clear that they were like, I don’t know how I’m going to cash flow. And it’s like, there are ways — you can refinance and use that money, or you could sell some property. And by just having more options, it just opens that door, at least for me.

Kyle Pearce: And we’re not here to tell everyone what they need to do. As long as you get started with something. And if you’re comfortable with that something, there’s no reason to actually change. This morning I didn’t tell you about this, John, but we had someone reach out who booked a call. This individual is a DIY investor, has been doing great, and basically has no intention of ever changing that. And it’s like, amazing, that’s fantastic. So we’re gonna talk about what are some tax efficiencies they might consider, any gaps that they might have. But at the end of the day, this fun game we play — which is finding these Canadian wealth secrets — whether you choose to act on them or not, is completely up to you.

Kyle Pearce: The key is, and what we try to do here, is educate so that at least you know the decision you’re making, you know what you’re getting and what you’re leaving. Because like everything else in the world, when you take one thing, you’re losing something else. You say yes to one thing, you’re saying no to something else. So it’s hard to get the full win on any strategy — you are either going to leave some on the table or not.

Kyle Pearce: And because I’m an optimizer, and this kind of brings us back to why I like to be diversified in strategy, is that I don’t like — I’ll call it FOMO — I don’t like to miss out on the benefits that I can get with certain strategies. But on the other hand, I also don’t want to be all in on one where down the road I have that regret where I go, shoot, had I just done this. So I would much rather, hopefully when I’m 110 and I look back on my life, say I got to participate in the benefit of that even if it was only a quarter of my net worth or a third of my portfolio.

Kyle Pearce: And I still got to benefit from these other things even though those things may not have produced the same upside that this thing did. I had that diversification and it also gives you a little bit of confidence in my opinion for a guy like me. When, say, if I was all in on an ETF strategy and the market goes for another 2008, I don’t care rationally what has historically happened afterwards. I know what it does to me. Because even on 5% dips, like I look at that portfolio and I go — it hurts, you know, even though the logic should be back up the truck.

Kyle Pearce: You know, Sean, who listens to the podcast, one of our clients, I just met with him yesterday on an annual check-in review call. He’s loving what’s going on with the volatility in the market right now. He’s looking at it going, I just can’t wait to hit his 10% dip mark because that’s when he starts layering more in. He just keeps doing it and he’s like, I don’t care if it’s a falling knife, he just keeps going. And it’s like it’s a game for him. For me I’m like, please stop dropping, please stop dropping.

Jon Orr: That’s right. Well, that’s what everyone’s trying to do. It’s like what you said last week when we were chatting — this is the benefit of this strategy, waiting for these moments or positioning yourself for these moments. Because when you know the store that you really like to go to, you don’t get upset when all of a sudden you realize there’s a sale. You just go and you’re like, great, there’s a sale on cat food. Let me load up on cat food because I need it and I want it and I’m gonna use it. And I’m not mad that the cat food last week was more expensive. Right, right. It’s like, so in a way, like we said, we would kind of give folks a glimpse of some of the strategies we’re using.

Jon Orr: That is a strategy that I am using. I’m not using it as 100% of my strategies though. I am positioning a chunk of my portfolio to back the truck up on that chunk of the portfolio when we have drawdowns in say diversified ETFs or global ETFs or global index funds or S&P index funds. So there’s a collection of those where it’s like, let’s back the truck up right now and layer into this type of asset class because we know this chunk of my portfolio, that strategy over time, is going to be a winning strategy as long as I commit to that type of move.

Jon Orr: So that’s like one chunk of my portfolio. We also talked about another strategy here today, which is specifically looking at creating income as a strategy of your portfolio. So thinking about high dividend paying funds, closed end funds, covered call funds, other funds that pay high income as a primary return instead of capital appreciation as a primary return. So when you’re thinking about your portfolio, investing in that — my primary goal, my primary strategy is to get the income every single month or every single quarter. And that will be a portion of our portfolio. And we’re not so concerned about the capital allocation or the value of the fund going up or down over the course of a long time because we have a consistent return in the form of dividends or interest or return of capital. Any strategy you want to share here today, because we’re talking about diversifying on strategy?

Kyle Pearce: Yeah, absolutely. Well, one thing that we’ve been doing is exactly that — trying to be a little bit more open minded with different approaches instead of being all in. So we did an episode on dividends and like how dividends work. I think it’s really important for the dividend investor to understand it. It’s not a bad strategy. Dividend paying companies are strong companies, and if they cut their dividend, that’s usually an early sign that maybe the company’s struggling. So maybe you wanna shift out before things get worse.

Kyle Pearce: Now some would argue that that means maybe you’re limiting the capital gain that you might get on some of these dividend stocks. I’ll even go further and say there’s ETFs that pay out based on index funds that are producing higher distributions, sometimes nine, 10, 11, 12%. There are some that are like ridiculous and you just have to be cautious if you go down that path. But let’s say you have an S&P covered call ETF fund. Basically what it is, is the fund is taking the capital and they’re buying the S&P 500, but then they’re selling covered calls on it. They’re doing an option strategy. You could do that option strategy yourself — takes more time, takes more effort, takes timing, takes all of these things.

Kyle Pearce: Or you hand it off to this fund whose business is doing this and generating a dividend. Now, the negative here is that oftentimes these funds over the longer term will lag the underlying index. So rational Kyle would say, why do it at all? But at the same time, I have some leveraged capital that I use for the Smith Maneuver and so forth. And actually, I kind of like to see that dividend come in.

Kyle Pearce: So some of my leveraged bucket — if you go in the index and the market goes down, you know how that makes you feel when you look at it and go, hey, I owe this much on my HELOC or on my margin account or whatever it is, and the market goes down. And you’re like, shoot. You could shut it off, which is a good move by the way, I recommend — shut off that idea and don’t even look at it.

Kyle Pearce: Or on the other hand, when I see it and I go, dividends are coming in and I’m gonna layer those dividends back into buying on this dip, that is a behavioral mechanism that’s helpful for me. So that strategy is helpful so that I can use more leverage than maybe I may have felt comfortable using because of that one strategy. So it kind of comes back to what you were saying, John — the repeatable process is probably more important than the exact strategy you’re picking. It’s what strategy is going to allow you to behave in this repeatable way so that you’re not going to, let’s say, be completely out of the market.

Kyle Pearce: Another part of the strategy that we do in our paper assets is we follow a company called Hedgeye. And Hedgeye is a macroeconomic data-driven company that kind of gives you a heads up as to what’s going on in the global macroeconomic picture, to determine what we might see in terms of tailwinds and headwinds in the economy, and when we’re gonna hit something called a Quad Four — which is when inflation is going down and GDP is going down at the same time. Those are not great times. Quad Four is typically when any major market crash would happen historically. So it just means be more alert. Maybe we’re not layering in during that time.

Kyle Pearce: But again, that’s only on a portion of the portfolio because we certainly don’t want to pull everything out to cash and maybe be wrong or something change over time. So the big move here that I think we have for those who are listening is, if you’re not already on a repeatable process for building wealth, make sure you pick one and you go — because volume is key. Get the volume going. And as that’s happening, you can start looking around to determine, rather than saying I’m going to completely change that strategy to some other strategy, it’s how do I layer in other strategies that might be helpful for me over time?

Kyle Pearce: So I am truly diversified because I would argue that as long as you’re taking those dollars and you have those dollars working for you, that is going to put you in a much better position. And again, for some people like myself, the more diversification, the more confident I feel, the better I can be as a participant in this game. Whereas for some others, you don’t need as much diversification to feel confident. You can follow the Morgan Housel approach and go, I’m just going ETF investing, and there is nothing wrong with doing that. The key is figuring out who you are and what level of diversification is going to be helpful for you so that you can stick to the plan.

Jon Orr: Right. And so in this episode, we kind of talked about those ideas, specifically diversification, but thinking about it in terms of asset class but also strategy. And those are some actionable next steps to think about moving forward about your strategy selection and how to build the system around bringing strategies into the fold.

Jon Orr: The third component we did hint at about diversification is what we call diversification of buckets — so this is diversification around your registered funds, your non-registered funds, different tax classifications. We talk a lot about that on different episodes sprinkled in here and there in this podcast, but we will have another episode dedicated towards diversification of buckets in that format. So that’s the third level of, in our way, true diversification. Because putting those asset classes inside different buckets is a form of diversification. So we’ll talk about that in a future episode.

Jon Orr: If you are just getting started or you are thinking about your portfolio and your portfolio management and your strategy, or maybe you do want to dive in right away to talk about diversification in terms of buckets, then maybe a good move for you is to reach out to us over at CanadianWealthSecrets.com forward slash discovery. There’s a form there to fill out and you can be talking to us about how to diversify your buckets and also your asset classes. We help do that with our clients every single day.

Jon Orr: If you want to also get started, maybe another good move for you is to learn about our four pillars of a healthy financial wealth system. And you can see what pathway you’re on by going over to CanadianWealthSecrets.com forward slash pathways. Just as a reminder, the content you heard here today is for informational purposes only and should not constitute any of this information as legal, tax, investment, or financial advice. Kyle Pearce is a licensed life and accident and sickness insurance agent and the president of corporate wealth management here at Canadian Wealth Secrets.

Canadian Wealth Secrets is an informative podcast that digs into the intricacies of building a robust portfolio, maximizing dividend returns, the nuances of real estate investment, and the complexities of business finance, while offering expert advice on wealth management, navigating capital gains tax, and understanding the role of financial institutions in personal finance.

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