Strategies for building and maintaining generational wealth

Building generational wealth requires careful planning, portfolio diversification, and regular rebalancing rather than simply holding assets indefinitely. To sustain wealth across generations, investors should aim for 10 to 20 different growth opportunities and focus on teaching the principles of portfolio review and opportunity selection to heirs.

Effective rebalancing involves removing underperforming assets and adding outperforming ones, similar to how market indices like the TSX 60 and Nasdaq 100 operate. For example, Bombardier was removed from the S&P/TSX 60 Index in 2020 due to its share price falling below $1, only to return to the index in 2021 and become a strong performer. Successful investors, such as Warren Buffett, also demonstrate the importance of reviewing portfolios to adapt to changing global conditions, such as his decision to sell airline stocks in favor of energy stocks in 2020.