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Importance of Diversification
Diversification is an important concept in investing. It involves spreading your money across different types of investments, such as stocks, bonds, and real estate. This helps to reduce the volatility and the risk of losing money if one investment performs poorly.
Barbie began to create a diversified portfolio, starting with low-fee index funds, like the Dow 30, the S&P 500, the Nasdaq 100, and others. She balanced the portfolio with high quality government and corporate bond funds, International Funds, Real Estate funds, and Inflation-protection investments such as Gold ETF’s.
Barbie is a Smart Doll
We can certainly imagine that Barbie’s investments mirrored the dynamic growth of the US economy over the last 60 years. Her lucrative choices, beginning in the 1960’s, could have included the pharmaceutical company, Searle, that developed “the pill” contraceptive for women.
During the oil embargo of the 1970’s, she invested in high-dividend-paying energy companies, like Exxon and Chevron. She was an early investor in IBM, Microsoft, Apple, Cisco and all the front-runners of the tech boom. She was an avid student and investor in communications, space travel, and the internet era. And now, with her movie-star status, no doubt she will double down on today’s trends, like social media, AI and self-driving EV cars.
Quality Investing – Understanding What She Owns
A key factor for Barbie is to “know what she owns”. Upon realizing she did not understand some of her investments, Barbie began to prioritize learning more. She joined classes at Lynn Kitchen’s financial clinic, Money Mastery for Women, to learn the Fundamentals of Quality Investing.
Barbie was not satisfied to leave her money and her financial destiny in the hands of others. She learned from Lynn the basic A, B, C’s of evaluating investments and how to lower her risks. She now takes pride in knowing what she owns, and loves talking with girlfriends about building wealth!
Long-Term vs Short-Term Investment Strategies
Another important consideration for Barbie is the difference between long-term and short-term investment strategies. Long-term strategies involve holding investments for several years or even decades, with the goal of achieving steady growth over time. Short-term strategies, on the other hand, involve buying and selling investments to take advantage of the natural cycles of the economy.
Barbie always considers her investment goals when choosing a strategy. If she is investing for retirement, for example, a long-term strategy is more appropriate. If she is looking to buy a dream asset, like her Beach House on Pink Sands Island, she uses a short-term strategy to sell assets when she needs the funds. Her dream goals always come true, because she plans for them!
What is Barbie’s Risk Management?
Investing always involves some degree of risk, but Barbie can manage that risk by being strategic in her investment choices. She can choose investments with lower risk, such as bonds, or balance higher-risk investments, such as stocks, with lower-risk investments to create a diversified portfolio.
Barbie’s strength is in understanding her risk tolerance when making investment decisions. If she’s uncomfortable with the idea of losing money, she may want to choose investments with lower risk, even if they offer lower returns.
Barbie Tops $1 Billion
Barbie has always been an “influencer”. The movie “Barbie” is now the first U.S. film directed by a woman to reach the billion-dollar mark worldwide, according to the Wall Street Journal. It is becoming a cultural phenomenon through what entertainment industry analysts have described as a savvy mix of consumer marketing and a story that is resonating with audiences. Movie-goers have packed theaters across the U.S. to watch the film, focusing on the Mattel doll, played by actress Margot Robbie, and her search for meaning as she leaves a pink utopia.
Only 5 other films have surpassed the $1 billion in box-office sales since the start of the pandemic. Greta Gerwig, who co-wrote and directed “Barbie” is now set to become one of the highest-grossing female directors in history. The next highest-grossing film by a solo female director was “Wonder-Woman” directed by Patty Jenkins, according to Comscore.
Investing in Media
The entertainment and media industry can be a lucrative investment opportunity for those with a keen eye for trends and a willingness to take risks. Senior media analyst at Comscore, Paul Dergarabedian, commented about the recent movie, “You don’t get to a billion dollars without a movie being some sort of a phenomenon”. It opens the way for sequels and long tailed cash flow opportunities for years to come.
But media is changing rapidly with the advent of streaming services and shifting consumer habits, making the media industry a high-risk, high-reward opportunity. Barbie should carefully consider her options and do her research before making any investment decisions.
Liquidity – Investing in Other Business Ventures
As a savvy investor, Barbie knows that diversifying her portfolio is crucial for long-term success, however liquidity is the key underlying necessity in all investments including other business ventures. If you cannot sell an asset, it becomes illiquid, a main factor in higher risk. Valuations of illiquid assets quickly evaporate especially during economic downturns.
Sometimes this is a hidden lesson that is painful to learn.
Overall, Barbie’s investment strategy is guided by her values, risk tolerance, and long-term goals. By diversifying her portfolio and carefully selecting investments that are high quality and liquid, she can maximize her returns and make a positive impact on the world.
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