I think there is an important lesson here. You can invest in assets that generate cash flows, with businesses being an example. You can also invest in assets that don't generate cash flows, with commodities being an example. I wouldn't be surprised if 25 years ago, there were people who advocated owning diamonds as an investment. Human beings think of better ways to generate commodities. Admittedly, assets that generate cash flows are not without their problems. Companies that supplied horse and buggy transportation would be an example. But diversification can decrease that risk.
"the growing effect of compounding over time will generate increased returns with little or no increased risk."If you believe in time diversification, increased time not only means increased return, but also decreased risk. As has been said by others, time may be the greatest asset in investing.
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I think there is an important lesson here. You can invest in assets that generate cash flows, with businesses being an example. You can also invest in assets that don't generate cash flows, with commodities being an example. I wouldn't be surprised if 25 years ago, there were people who advocated owning diamonds as an investment. Human beings think of better ways to generate commodities. Admittedly, assets that generate cash flows are not without their problems. Companies that supplied horse and buggy transportation would be an example. But diversification can decrease that risk.
Post: Gold and Diamonds
Link to comment from June 13, 2026
"the growing effect of compounding over time will generate increased returns with little or no increased risk." If you believe in time diversification, increased time not only means increased return, but also decreased risk. As has been said by others, time may be the greatest asset in investing.
Post: A Lifetime of Wisdom
Link to comment from January 14, 2024