For investors, it may be a good time to stop and take stock of your financial strategy, says Suze Orman, host of the "Women & Money (and Everyone Smart Enough to Listen)" podcast and co-founder of emergency savings firm SecureSave.
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There's no>1. Your holdings aren't diversified enough
When the bull market was in full charge for much of 2020 and 2021, many investors gravitated toward funds that had performed well recently, such as Cathie Wood's ARK Innovation ETF. "People loved Cathie Wood, and that's all they bought. And they think because they bought one ETF that they're diversified. How foolish can you be?"
The problem, points out Orman, is that although funds like Wood's hold a variety of stocks, the portfolio is still a relatively narrow one centered around a particular theme. When that particular corner of the market suffers, as it has of late — the ETF in question is down some 56% from its February 2021 peak — your portfolio could be hurt by the losses.
