Ensure that Your Portfolio Is a Winner: Diversify!

Ensure that Your Portfolio Is a Winner: Diversify! by Jeff Holland{1:30 minutes to read} According to Nobel Prize winner and economist Harry Markowitz, diversification is the only “free lunch” in economics. The smartest investors diversify—by doing so, you drastically minimize risk and the potential sabotage of your financial future.

By diversifying your assets, you’ve ensured a “win.” The Kentucky Derby provides a fitting analogy; all the horses are great, but their prowess can vary from race to race, from year to year. By diversifying, you bet on all of the horses—and you always win! (And hopefully you will sell some of the winning “horses” and buy some of the losing ones knowing that they will be winners one day).

Our goal is for our clients to win. By diversifying through global asset classes, our clients get the benefits of non-correlated asset classes that have a positive expected rate of return over time.

Diversifying is more than owning 20 stocks with varying names. Comprehensive diversification includes:

  • International investments;
  • US investments;
  • Stocks; and
  • Bonds (Bonds provide a cushion and reduce volatility by negatively correlating to stocks)
  • Factor Investing (Investing in factors to produce higher expected returns ( ie. value, size, profitability))

Despite fluctuations in trends, a wide net that includes global and US companies is important. We can help you create a diverse portfolio. Contact us to begin today.

Jeff Holland

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