facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog search brokercheck brokercheck Play Pause
A Cosmopolitan Look at Investing Thumbnail

A Cosmopolitan Look at Investing

Ok, I admit it, cocktails have been a part of our nightly routine during Covid. You too? I get it!

Stephen is an excellent mixologist.  What’s the difference between a mixologist and a bartender?  I don’t know. But anyway, he has perfected the Cosmopolitan, which is one of my favorites.  Here is the recipe:

  • 1 ½ oz. Vodka
  • ½ oz. Lime juice 
  • 1 oz. Triple sec
  • 1 dash Cranberry juice
  • 1 lime wedge for garnish

Add all the ingredients into a cocktail shaker, add ice and shake until well-chilled. Strain into a chilled “martini” glass. Add the lime garnish.

A few nights ago, when he was shaking all the ingredients together, I had an epiphany. Stephen, I said, “mixing cocktails is like building an investment portfolio!” Stephen responded that I really needed this drink.

Let me explain (this all came together before I had the Cosmopolitan):

The base ingredient in the drink is vodka.  More vodka leads to more... Fun? Relaxation?  I'll leave it to you to decide.  Too much vodka can be risky – I'm sure you all have some stories. The base ingredient in a portfolio is stocks, which, like vodka, adds to the reward, but also the risk.  

I have Stephen add a little extra ice to mine. Think of ice like bonds – ice reduces the potency of the drink like bonds reduce volatility in an investment portfolio

Once you determine the appropriate amount of vodka and ice, you can build around it.  To get a perfect Cosmopolitan, you add lime juice, triple sec and cranberry juice. Each ingredient has a unique taste, but when combined, adds to a smooth blend. These are like international, emerging markets and real estate securities, which all move in their own directions, but when added together in a portfolio, results in a smoother ride. 

Combining individual elements, whether in a drink or in a portfolio, makes the whole greater than the sum of its parts.

So next time you are enjoying one of your favorite cocktails, think about your investment portfolio. Is it as balanced as your cocktail?  If not, you have some work to do.

One important note: Please don’t make any changes to your portfolio while enjoying a cocktail. Not a good mix.

About Shari...

Shari Greco Reiches co-founded Rappaport Reiches Capital Management with one goal - to maximize the return on life for her clients.  Please connect with Shari below.  She loves to talk about investing, financial planning, and Barry Manilow.

The author does not intend to provide investment, legal or tax advice as these materials are for general educational purposes only.  Please consult your legal, tax or investment professional for advice on your particular situation. This material is derived from sources believed to be reliable, but its accuracy and the opinions based thereon are not guaranteed. It is not intended to be a solicitation, offer or recommendation to acquire or dispose of any investment or to engage in any other transaction. Investing involves risk including the possible loss of principal. Past performance does not guarantee future results. Please refer to RRCM’s Form ADV Part 2 for additional disclosures regarding RRCM and its practices.