Felicity Huffman is an American actress known for her roles in many popular movies and TV shows. However, she also made headlines in 2019 for her involvement in the college admissions scandal. Despite this controversy, Felicity has proven to be savvy when it comes to managing her investments and finances. In this article, we will explore some of the ways Felicity has invested her money wisely over the years and lessons we can learn from her approach to investing.
Diversify across asset classes
One key to Felicity’s investment success is diversification across different asset classes. She has invested not just in stocks but also real estate, art, bonds and other alternatives. This reduces overall risk and protects against volatility in any one market. Like Felicity, most investors should hold a mix of equities, fixed income, real assets and cash based on their risk appetite and goals.
Invest for the long-term
Felicity has focused mostly on long-term investments rather than short-term speculation. For instance, she has held onto real estate investments like her Hollywood Hills mansion for over a decade. She also invests in index funds and ETFs which are designed to provide steady growth over time. Avoiding the temptation to frequently buy and sell helps avoid transaction fees and is a proven way to build wealth.
Leverage advisors and expertise
Despite her business savvy, Felicity does not try to invest entirely on her own. She has leveraged professional advisors like wealth managers, real estate agents and investment bankers when making major financial decisions. Their expertise helps her access unique opportunities and make informed choices aligned to her goals. Like Felicity, retail investors should seek input from financial advisors when navigating their investment options.
Maintain adequate cash reserves
Even someone as wealthy as Felicity realizes the importance of cash reserves for liquidity and to take advantage of market opportunities. She maintains enough cash to support her lifestyle, while keeping other funds liquid for new investments. During volatile markets like the 2008 financial crisis, holdings like cash help limit losses on existing investments until they recover value. Saving at least 10-20% of your portfolio value in cash is a good buffer.
In summary, Felicity Huffman provides a great case study in savvy long-term investing. By diversifying her holdings across asset classes, investing for the long run, utilizing advisors and keeping cash reserves, she has built an impressive portfolio over time. Retail investors should take note of these best practices exemplified by Felicity as they look to manage their own investment accounts.