The Importance of Putting Your Finances Under a Stress Test

This piece from Swaay shares some thought-provoking insights on finance. It’s called A Global Pandemic is a Good Reminder to Stress Test Your Finances.

In it, the Fiscal Feminist podcast host, Kimberlee Davis shares some interesting perspectives on finance. This one, we thought, was particularly fascinating:

This pillar has to do with the more active aspects of wealth creation. Stocks can be a sizeable part of an investment strategy, but diversification of asset classes ⁠— whether its mixing bonds, alternative investments (such as liquid hedge funds, hedge funds, private equity, or REITs), real estate or art ⁠— is a key component of long-term financial independence. It aims to maximize returns by investing in different areas that would each react differently to the same event. If one portion of your portfolio is declining, it may ensure that other portions are not declining or not declining as much. 

She’s very generous with her insights here so do give the rest of the article a read. Just click on this link to to gain access to it in full.