Invest in Vanilla

The very common term used among smart investors is - “Invest in Vanilla”. So What it means by investing in Vanilla?

Well, Vanilla means plain. And in case of Investing, Invest in Vanilla means invest in Equity Diversified Manner. And not in the sector or concentrated manner. According to the data of past more than 50 years in the world, Diversified Portfolios have clearly outperform any other kind of Sector portfolios.

In case of Mutual Funds also, Vanilla (Equity Diversified) Mutual Funds have clearly outperform any other kind of sector/thematic funds in the long run. In the short run, Sector/Thematic funds can be on 2 Extremes means that can be on the top performing funds of the year or they may be at the bottom. But in the long run (More than 10 years), Vanilla funds clearly outperform any other funds.

And that’s why Smart investors diversify their portfolios. And they advise others to invest in Vanilla only. The term Vanilla become so much popular among the smart investors. Warren Buffet is the Vanilla Investor. He invests in Diversified Portfolio. Via his Company Berkshire Hathaway, he holds 30 odd stocks portfolio in various industries.

The reason why Vanilla Investing is favourite is because it is next to impossible to go something wrong with this type of investment strategy.

But if you invest in concentrated manner than you can be on 2 extremes. Either you are on the top performing list or you are at the bottom.

So Invest like Vanilla and enjoy superior Investment returns…!!!