GO
Loading...

Enter multiple symbols separated by commas

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

Contact FA Playbook

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Financial Advisor Council

Latest Special Reports

  • From left: Sergey Brin, Dick Costolo, Ryan Seacrest

    Code Conference, from those who produced D: All Things Digital Conference, addresses the impact of digital technology on our lives and businesses.

  • Financial Advisor

    Featuring CNBC's Financial Advisor Council, this video series will aim to educate investors with straightforward financial advice.

  • Waitress tablet

    Trailblazers leveraging the power of technology and innovation to grow their business—and disrupt the competition.

Financial Advisors