The Barbell Investment Strategy
Weight both extremes of the risk spectrum, avoid the confusing middle.
- Difficulty
- Moderate
- Time to result
- ~ongoing to results
- Steps
- 4
- Confidence
- 85%
The Barbell Strategy weights both ends of the risk spectrum while avoiding the confusing middle. Bloom's risky end is investing in himself and his own businesses, where he has a high degree of control over outcomes; his safe end is boring stock-market index funds. He deliberately avoids in-between assets he doesn't fully understand. A key distinction is control: he prefers risk in businesses he drives over risk in something like crypto, whose price he cannot influence. If he can't control it, he wants it super safe and basic.
Origin
Bloom applies the barbell model from his own investing philosophy after seven years in private equity, concentrating risk in ventures he can influence and parking the rest in Vanguard-style S&P 500 index funds.
Core principles
- 01Weight the very risky and the very safe ends, not the middle.
- 02Your riskiest bets should be things you can influence and control.
- 03Anything you can't control should be super safe and boring.
- 04Only invest in things you can touch, feel, and understand.
How to run it
- 1
Define the two ends
Map your risk spectrum and decide to weight only the most risky and least risky ends.
- 2
Put risk where you have control
Place your high-risk capital and energy into your own businesses, where your effort influences the outcome.
Pro tip Prefer controllable risk (your business) over uncontrollable risk (crypto prices you can't influence).
- 3
Keep the rest boring
Put the safe portion into simple, basic vehicles like broad index funds.
- 4
Skip the middle
Avoid mid-risk assets you can't touch, feel, or understand.
In the wild
Bloom concentrates his risky capital in his own businesses he can steer, and puts the safe side into a Vanguard S&P 500 index fund.
→ He gets high upside where his effort matters and stability where it doesn't, without holding assets he can't understand.
Common mistakes
Loading the middle
Holding mid-risk assets you don't understand gives you neither controllable upside nor real safety.
Taking risk you can't influence
Betting big on things like token prices you have no control over removes your main edge as an operator.
Is it for you?
Best for
Operators who can compound risk into businesses they control.
Not ideal for
Passive investors with no business to deploy high-conviction risk into.
From the transcript
“you want to be uh weighted on both of those ends.”
“I really only want to invest in things that I can really touch and feel and understand.”
From the episode
Sahil Bloom: The 5 Types of Wealth You Need to Design Your Dream Life
Sahil Bloom