This article appears as part of Casey Weade's Weekend Reading for Retirees series. Every Friday, Casey highlights four hand-picked articles on trending retirement topics and delivers them straight to your email inbox. Get on the list here.

Here, author Nick Maggiulli shares how his portfolio, though often trailing the S&P 500 during bull market years, weathered recent storms far better thanks to strategic diversification. While it’s tempting to chase the high-flyers, real financial security comes from balancing your wealth across a variety of investments—even when it means you won’t always “win” in the short term. In that light, here’s what you should know:

📌 Diversification’s true role is managing risk, not maximizing returns: It’s about protecting your future, not beating the market

📌 Even the best diversified portfolios lose money sometimes: This is normal—and necessary—for long-term success

📌 Choosing peace over performance is an emotional commitment: Expect moments of regret, but recognize them as signs you're following a wise and patient path

Remember: Diversification is your safeguard. Wouldn’t you rather endure small, manageable bumps in the road than risk a catastrophic financial fall?