Diversification (finance)

Zook argues that the more risk-averse an investor is, the more diversified their portfolio should be.

“So the more risk averse somebody is, the more diversified they should be”

Modern Wisdom: The New Way For Ordinary People To Build Wealth - Tony Robbins - #1153 (Sep 21, 2026) · Listen from 36:57

Zook says the most common investor mistake he sees is making decisions in dollar terms rather than percentages of a portfolio.

“People make investment decisions based on dollars. That is crazy. No professional investor does that. It has to be on percentages”

Modern Wisdom: The New Way For Ordinary People To Build Wealth - Tony Robbins - #1153 (Sep 21, 2026) · Listen from 37:08

Zook argues risk is really volatility tolerance and that most investors overestimate their ability to hold through losses.

“If you can't see it turn into 50 cents overnight, you don't belong in it”

Modern Wisdom: The New Way For Ordinary People To Build Wealth - Tony Robbins - #1153 (Sep 21, 2026) · Listen from 33:22

Zook says average portfolio correlation has risen from about 15% in 2005 to 82% today, worsening to 89% in down markets.

“your average correlation was about 0.15, which meant they correlated about 15% with each other. 85%, they were moving different directions, okay? Today, literally, with no change in that asset allocation, it is 82% correlation”

Modern Wisdom: The New Way For Ordinary People To Build Wealth - Tony Robbins - #1153 (Sep 21, 2026) · Listen from 11:18

Robbins cites a statistic that a majority of Gen Z and millennials diverted investment money into sports betting and a quarter see it as their financial future.

“52% of them in the last year have taken money that they would have used investment to put into sports betting, and that 26% think that sports betting is their way to build their financial future”

Modern Wisdom: The New Way For Ordinary People To Build Wealth - Tony Robbins - #1153 (Sep 21, 2026) · Listen from 34:09

Robbins reports Ray Dalio's holy grail principle that eight to twelve non-correlated investments reduce risk by about 80% while increasing upside.

“I found out that if you will confine 8 to 12 non-correlated investments, and they're things you believe in, you reduce your risk by 80% and increase your upside”

Modern Wisdom: The New Way For Ordinary People To Build Wealth - Tony Robbins - #1153 (Sep 21, 2026) · Listen from 4:05