"I spent my 20s not having any money to invest," she told Business Insider. "I was going to business school, it wasn't an option for me."
But once she started making a more substantial paycheck in her 30s, Krawcheck decided to put her money to work.
"I became a research analyst, so I started to invest in individual stocks," she says. "I said, 'Oh this analyst across the way thinks this stock is going to go up, I'm going to buy that one!' I had some nice successes, but I always forgot to sell."
Krawcheck's a-ha moment came when she realized that her investment strategy required a considerable amount of time without providing requisite payoff.
"Pretty quickly in my 30s I said, 'Diversified investment portfolio for me,'" she says. "Maybe I'll have a little bit of money on the side to play with and have fun with, but I'm not going to think I'm any better at this than anyone else, even though I was a research analyst."
Instead of trying to beat the market by picking individual stocks, a diversified portfolio minimizes risk by encompassing a broad range of investments, such as the ETF.
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