Investing and Diversification
How your money is invested among many different kinds of stocks, bonds, mutual funds and ETFs—also called “portfolio diversification”—plays a far greater role in generating the financial results you want than focusing on any individual security.
Effective portfolio diversification reduces the likelihood that a downturn in a few securities you own will dramatically impact the overall value of your portfolio.
But diversification is just one aspect of effective portfolio management. You also need to:
- Choose an appropriate asset allocation strategy with an optimal mix of stocks, bonds and cash for each of your retirement, college savings, and taxable accounts
- Monitor the performance of your mutual funds, as well as the fees they charge, to make sure they’re not taking a huge chunk of your hard-earned gains
- Periodically rebalance your portfolio’s asset allocation to its target mix without taking a huge tax hit
Investors often struggle to figure all this out on their own. That’s why many turn to a fee-only, fiduciary investment advisor in the Wealthramp network to manage their portfolios.
Key questions about investing and portfolio diversification a financial advisor can answer
- Do I need to adjust my current mix of stocks, bonds and cash in my retirement, college savings and taxable accounts (also called “asset allocation'') to achieve my investment goals?
- Do I have too much money invested in a few stocks or funds?
- I’ve been given company stock. Should I sell a portion of it now in case its price falls significantly at some point?
- How do I rebalance my portfolio without taking a huge tax hit?
Portfolio Diversification Challenges
How a financial advisor in the Wealthramp network can address your portfolio diversification challenges
Serving as your financial advocate, your financial investment advisor in the Wealthramp network works directly for you. They will create a comprehensive plan that addresses all your current and future financial goals, along with helping you grow your wealth.
As a registered investment advisor, they can review your portfolio and recommend changes to achieve greater diversification and alignment with your investment objectives. They can:
Invest with expert advice on your side
The biggest investing & diversification mistakes
Overlooking your asset allocation over time as your financial objectives, timeframe and risk tolerance change
Failing to achieve an appropriate level of portfolio diversification to smooth out market volatility
Neglecting an optimal asset allocation strategy for each of your investment accounts
Paying thousands of dollars in investment fees for poorly performing mutual funds when index funds and ETFs offer better returns at lower costs
Making impulsive investment decisions that nearly always result in “buying high” and “selling low”