Why Global Thinking Creates Stronger Portfolios
Investing isn’t just about stocks. It’s about smarter structure.
📌 The Quick Hit
(For when you only have 90 seconds and a decent cup of coffee.)
A “global” portfolio has a greater scope than just foreign stocks.
Diversification has layers: allocation, geography, sector, company size, and style.
Beware “gravitational pulls” (biases, affinity stocks, and stubbornly holding losers).
The antidote: ask every investment, “What layer are you adding?” If you can’t answer, it’s dead weight.
Goal: Build (or renovate) a portfolio that works as hard globally as you do locally.
🌎 Global ≠ Just Geography
When people hear “global investing,” most think: foreign stocks, foreign headaches, foreign exchange rates. Global is an important role in a well-diversified portfolio.
But “global” is bigger than geography. It’s about scope—how many ways you can add useful layers to your portfolio.
Think of your portfolio like a house. If you just build a frame and stop, you don’t have a home—you have a skeletal wood sculpture that leaks. What makes it livable are the layers: drywall, insulation, windows, roofing. Each layer protects, strengthens, and refines.
A portfolio works the same way. Your “layers” of diversification protect against risk, enhance potential, and customize the fit to your needs.
🏗️ Five Big Layers of Diversification
Here’s how most emerging investors should think about it:
Allocation – Stocks, bonds, cash, real estate, alternatives. This is the foundation of your house.
Geography – Exposure to international markets isn’t just “extra credit.” It lets you benefit from growth that isn’t tied to your home economy.
Sector – Technology booms while energy slumps. Retail pops while financials grind. Each sector has its cycle.
Size – Companies range from trillion-dollar megacorps to scrappy micro-caps. Each size behaves differently across cycles.
Style – Growth, value, momentum… like design trends, one “style” leads until another steals the spotlight.
These aren’t advanced tricks—they’re the essentials. If you stop here, you’ll be ahead of 80% of DIY investors.
🍎 Gravitational Pull (a.k.a. How We Mess This Up)
In theory, layering diversification is easy. In practice, gravity shows up. Not Newton’s, but investor gravity.
Magnet #1 – Biases
We love what we know: big-name tech stocks, the brand we wear, the company we work for. But knowing a logo doesn’t mean it belongs in your portfolio.
Magnet #2 – Affinity Stocks
That stock you doubled your money on? Or the one you inherited from Grandpa? Or the shares from your old employer? Those emotional ties can cause us to hang onto stocks that don’t fit, potentially derailing your diversification.
Magnet #3 – Dogs
We’ve all bought a tip, a gut feeling, or that “hot stock” on CNBC… only to watch it tank. And then we hold it forever because selling feels like admitting defeat. (Fun fact: humans hate losses more than we love gains; psychologists call it “loss aversion.” Investors call it “ouch.”)
💉 The Antidote: De-Magnetize Your Portfolio
Here’s the pro move: for every stock, ETF, or fund you own (or consider buying), ask:
“Which layer does this add to my portfolio?”
If you can’t answer? That position is dead weight. Time to re-think your holdings.
Pro investors do this constantly. Not because they’re smarter, but because they’ve trained themselves to override ego and emotion. They build portfolios that serve goals, not personal pride or attachments.
Your portfolio is a house that you live in for decades.
If you’re just starting, focus on layering from the ground up.
If you already have a portfolio, think of this as a renovation project: strip out the clutter, patch the weak spots, and add “global” strength where it’s missing.
Next week, we’ll look at some sample “blueprints” for globally layered portfolios - so you can see what this looks like in action.
✨ Closing Thought
Building a portfolio without layers is like moving into a house with no walls. Sure, you’ve got a roof over your head, but one good storm and you’re camping in the living room. The trick isn’t piling on more “stuff,” it’s making sure every layer - allocation, geography, sector, size, style - does its job.
Get the structure right, and your portfolio won’t just stand tall, it’ll feel like home. 🏡
🚀 Next Up:
Sunday - “How Money Buys Happiness”
Thursday - “How to Build a Model Portfolio”
This publication is for brains, not bets. The Other Side of Obvious shares ideas, stories, and general financial information—not personalized investment, tax, or legal advice. Investing comes with risk (including losing money). Talk to a pro before you act. Please take time to read these important disclosures before you get started.
As always, thought provoking with humor and sensitivity. I do have a handful of questions for you! Thank you again for sharing your experience🙏