It's fortunate that his son-in-law looks disgusted when Lord Grantham says his friend is earning an excellent return in a US investment run by someone named “Ponzi.” It’s hard to keep a straight face in later episodes when Lord Grantham is ready to fall for a “get rich quick” investment he doesn’t realize has been invented by the infamous Mr.
Even if it’s a little harder to diversify than it used to be (increasing correlation amongst assets), the benefits of diversification pay off over time. Everyone is different in terms of the right mix of income-generating and growth investments. Returns are smoothed and volatility (risk) declines when a portfolio is diversified. The investment world calls “diversification” the only “free lunch” accessible to all investors. He risked his entire fortune on a “sure bet.” We’ve seen it all before: the Dutch tulip craze, the South Sea bubble, Enron, the dot.com crash… Lord Grantham’s concentrated portfolio was not diversified…a recurring problem with many investments. Lord Grantham becomes agitated – flushed with panic, he asks his advisor why so much was put into one single investment? The advisor soberly reminds Lord Grantham that he was the one who cajoled his advisors to concentrate their wealth largely in a single investment. His advisor quietly tells him the Canadian firm management was incapable and most of Lady Grantham’s fortune was concentrated in this one holding.
The reason: too much money sunk into a Canadian railroad scheme that went bankrupt.Lord Grantham is stunned and demands to know how a solid, promising investment (trans- Canada railroads) could fail since “everyone” knew this was a “surefire” investment. We’re not even up to the stock market crash of 1929 when Lord Grantham is summoned to London to hear his investment advisor tell him that most of his fortune has been lost. Affluent Americans, on the other hand, often divided property amongst both sons and daughters Lady Grantham brought a large fortune with her when she married Lord Grantham. A daughter cannot inherit in her own right – her family’s estate (home, property) passes to the closest living heir if there are no sons. England still retains the same inheritance traditions so evident in Pride and Prejudice, for example. She is now in her 40s and their have 3 grown daughters. Investments Behaving Badly and Enticing Pyramid Schemes:įrom the very first episode we understand the glory (and expense) of Downton Abbey draws on the ample funds Lady Grantham brought to the marriage.
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