Portfolio Diversification: Why Your Portfolio Should Look Like a Baseball Team

As many of you are aware, Jeremy and I spend most of our free time at youth travel sports. Sometimes it feels more like our full-time job. Personally, I help coach both my son’s travel baseball teams. Recently spending over 12+ hours in Harrisonburg with my oldest son’s team gave me time to think about the similarities between helping 12 year olds find success on the field and investing—specifically portfolio diversification.

If you’re a baseball fan, you know one thing for sure: no team wins with just one superstar. Sure, it’s fun to have a power hitter who can crush 40 home runs or an ace who throws 100 mph fastballs, but a championship season takes more than that. You need balance, depth, and players who can do different things.

Funny enough, that’s exactly how investing works.

You Can’t Rely on One Slugger

Imagine if your favorite team only had one great player. They might win a few games when that star’s on fire, but what happens when he strikes out or gets injured? The whole team falls apart.

That’s what happens when you put all your money in one stock. It feels exciting when it’s going up—but if that stock tanks, your whole portfolio goes down with it.When you know how to diversify investments, you can effectively build in a backup plan or safety cushion that will keep you going. Portfolio diversification spreads the risk so one bad game (or company) doesn’t ruin your season.

Every Player Has a Role

Baseball teams are full of specialists. You’ve got speedy leadoff hitters, reliable fielders, closers who lock down the ninth inning, and bench players ready to step in. They’re all valuable, even if they don’t all make highlight reels.

Investing is the same way:

Stocks are like your sluggers—they swing for the fences and aim for big growth.
Bonds are your steady utility players—not flashy, but reliable when you need them.
Other investments (like real estate or international stocks) are like those versatile players who shine in the right situations.

A good portfolio, like a good team, needs a mix. Implement good portfolio diversification through a team of great players, and you’ll see it pay off.

Slumps Happen

Every baseball player goes through a cold streak. Even MVPs strike out. But that’s why teams have lineups—if one guy’s slumping, someone else can step up.

In the stock market, sectors and companies take turns leading. Tech might slump while energy or healthcare rallies. With portfolio diversification, other parts of your portfolio can pick up the slack when one area cools off.

It’s a Long Season

A baseball season runs 162 games. You don’t panic if your team loses two in a row—there’s a lot of ball left to play. Investing works the same way.

Chasing hot stocks or panic-selling after a dip is like benching your best hitter after one strikeout. Success comes from patience, sticking to the game plan, and letting time do the heavy lifting.

The Championship Mindset

At the end of the day, winning teams and winning investors have the same secret: balance, discipline, and trust in the roster they’ve built.

So, when you’re coming up with portfolio diversification strategies, think like a manager filling out a lineup card. Don’t put all the pressure on one star. Build a team of investments that complement each other, and you’ll have a much better shot at long-term success.

Because in both baseball and investing, it’s not about winning one game — it’s about winning the season.