Go International

Diversification is one of important factors for successful investment. People often got confused about diversification and thought they had appropriately diversified if they bough multiple stocks. The matter of fact is that you won't really diversify even if you buy 100 stocks but in one or related sectors, e.g. all of them being in the tech sector. The idea of diversification is that if one sector got crashed, the other sectors might hold up well so that your risk is reduced. After all, it is less likely that everything goes down all at once, unless we are facing an Armageddon type of event like the finanacial crisis in 2008/2009. So it is prudent to diversify. One important diversification is to go different markets instead of focusing on one or two markets. If your portfolio has all or most of the stocks from the US, it would be a good idea to also buy some international stocks, i.e. go international. One easy way to do so is to buy an ETF, iShares International Select Dividend ETF (IDV). IDV includes dozens of stocks across a wide range of sectors and in over 20 countries, although it is more concentrated in the Europe. However, Australia is its largest holding country, which is what I like as I really think Australia is one of the countries with the brightest prospects. Actually I have already invested in the Australian ETF for stocks as well as the AUS currency, both of which have done very well.

Over time, IDV should be doing great as it is relatively cheap and also paying a very healthy dividend at 4.8%.