Learn how to invest with a trip to my mother's kitchen

Like many of us this winter, I am making the long trip back to my parents’ house for the holidays. We need your help to stay independent Subscribe today to support Salon's progressive journalism Markowitz and his co-author, Merton Miller, won the Nobel Prize for formalizing the intuition of my mother's kitchen with math: diversifying across assets, especially if they have nothing to do with each other, means you can have the same return while lowering your risk. The last time the stock market experienced a disastrous crash — during the Great Recession of 2008 — less risky, lower return assets went in the opposite direction. Diversification means you don't just pick winners — you pick losers, too, with the thought that they might be winners one day The emotional barrier with diversification is that when one asset type — like tech stocks — is doing so well, investing elsewhere can feel like missing out on a great party. In practice, diversification looks like investing in many different asset types: not just the stock market, and not just the S&P 500 or your favorite index.