Diversification and Asset Classes

Diversification and Asset Classes
Diversification and Asset Classes — Protecting Your Investment Eggs

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Protecting Your Investment Eggs

It’s a bit of a worn-out phrase, but “don’t put all your eggs in one basket” is about the most universal investment advice out there. Spreading your investment eggs across multiple baskets is called diversification and it can help to manage risk.

We’re talking about a top-down strategy. Asset allocation means dividing your investments among broad asset classes, such as equities (stocks), fixed income (bonds) and cash accounts. You can further dissect specific sub categories, adding multiple individual investments to adjust your strategy to match your risk tolerance and financial goals. This more specific selection is called diversification.

Spreading your investment eggs across multiple baskets can help to manage risk.

Company size does matter when deciding where to invest. What constitutes a large, small, or mid-size company? What are the pros and cons of growth versus value investing styles? Why might you consider including both in your investment strategy? We’ll uncover the differences between domestic, global and international funds. Discover how sector investing can focus your diversification decisions and introduce you to a few of the market indices that are used by investors as performance benchmarks.

Plan with us

Diversification can be a beneficial investment strategy. By spreading your money across multiple asset classes, sectors and geographic areas, you may be able to decrease your chance of experiencing large market swings while increasing the potential for higher returns. We can show you how to get started.

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