GO
Loading...

This optimistic investor is bullish on portfolio diversification

Mediaphotos | E+ | Getty Images

Given the stock market's recent bull run, many individual investors might be tempted to abandon the notion of diversification within their portfolio. But not Derek Bullard.

Late last year, the 43-year-old entrepreneur from Charlotte, N.C., sold a mental health services company that he co-founded in 1999 to a private equity firm and invested his multimillion-dollar windfall in short order.

With his losses in 2008 still fresh in his mind, Bullard worked with a financial advisor to assess his risk tolerance and chose to invest in a relatively conservative portfolio of dividend-paying stocks, bonds, exchange-traded funds and cash equivalents. So far, he said, the portfolio has earned an average return of about 5 percent.

Worried about the prospect of rising interest rates, he has looked to hedge his risk on the fixed-income side by focusing on short-term bonds. He owns municipal bonds but has steered clear of holdings tied to financially troubled states.

(Read more: Jim Cramer on portfolios.)

Though Bullard is upbeat about the economic outlook, he hasn't forgotten the battering his individual retirement account took during the financial crisis.

"Banks are loosening up on lending money now, and deal flow is more robust," he said. "I think the economy is heading in the right direction, but I still remember pretty vividly what happened in 2008."

--Anna Robaton, Special to CNBC.com

Featured

Contact Playbook

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More

Financial Advisor Council

  • Brittney Castro

    Founder and CEO of Financially Wise Women, an investment advisory specialized in helping women and couples meet financial goals.

  • Richard Coppa

    Richard Coppa is managing director of Wealth Health, advising high-net-worth executives and business owners.

  • Mark Cortazzo

    Mark Cortazzo is senior partner and founder of MACRO Consulting Group.

Latest Special Reports

  • To kick off our year-long anniversary, we created a list of top leaders, icons and rebels.

  • An era of innovation dominated by secretive corporate labs is ending. Time for you to help crowdfund the future.

  • CNBC and Institutional Investor host the 4th Annual Delivering Alpha Conference.

Financial Advisors