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The Wise Investor


4.9 Portfolio construction
Once again, Kate and John had taken a long
rest. The afternoon light had begun to fade, and the
air had become quite chilly. It was late autumn now,
and winter would soon be upon them.
John looked forward to the sight of the pure
white snow lying heavily on the tree branches, and
children playing joyfully in their heavy winter coats.
Even so, he was always glad when spring came
again, and the young green shoots burst through the
freezing snow, little sparks of life battling bravely
against the fierce elements.
All through the summer they would grow, until
autumn came once more, and the seasons would
give way to gentle warm afternoons and cool
evenings.
"Kate," John said as puff of mist blew from his
mouth, "we should be going soon. While we are still
here, though, there is another important topic I
would like to cover. This involves the planing and
management of your investment portfolio."
Kate looked on in curiosity. Although she had
little money of her own, after all these talks about
investment she almost imagined that she actually
had a whole range of different investments herself.
Perhaps, one day, she would.
"Firstly, as I have said many times, the three
primary investments are interest-bearing deposits,
property and shares.
People invest in many other things, from gold to
rare coins, but these all have problems
Later I will go through a few of the more
common ones, and why you should avoid them.
Their main flaw is their lack of income, which
gives then no intrinsic value at all, apart from the
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