Wealth Management Tips: How to Diversify Your Investment Portfolio?

October 29, 2019 | Bernard Carter
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A diversified investment portfolio helps manage your risk. To put the concept more simply, just as you don’t want to keep all your eggs in one basket (so to speak), nor do you want to keep all your money in one type of investment.

For instance, keeping all of your money in high-tech stocks may be alluring since there are several hitting-it-rich, overnight success stories in that market. However, high-tech stocks can also be highly volatile. Individual markets can prove to be riskier than you may want to consider, especially if you’re on the path to pursuing long-term financial goals. Keeping specific high-risk stocks to a minimum may better suit your long-term strategy for a diversified investment portfolio.

Likewise, while a diversified investment portfolio will contain stocks, bonds, and possibly real estate, there are many considerations for further dilution and diversity in each of these categories. If you have participated in an employee stock purchase plan or a 401K matching program through your employer, these stocks will need to be examined, analyzed, and traded for a truly diversified investment portfolio and optimal performance. Real estate, while based on “location, location, location,” is also subject to changing trends as urban renewal becomes stronger, and property taxes become higher.

Investing in fixed-income funds and indexes may also help protect against the volatility of the markets. Additionally, strategizing when to get into specific markets, having the discipline to know when to leave other markets, and employing the agility to act rather than react with informed decision-making creates a strong foundation for investment portfolio management and strong diversification to absorb market risks and trends. We can help you with that.

A broadly, diversified investment portfolio is essential to proper portfolio management. At H&A, our wealth management team provides you with three market cycles-worth of knowledge and experience to thoroughly and adequately examine your balance of holdings. We know that your finances and your investments are hard-earned. So while, of course, you want to reap the benefits of proper investments, the key is a diversified investment portfolio that enables growth while minimizing overall risk. This happens when you diversify your holdings, so they are not invested solely in one company, one market, or one sector.

Our wealth management approach gives you access to a knowledgeable and trustworthy team of professionals, ready to partner with you on strategic investment portfolio management. Together, we can work toward your financial goals in the ways that make the most and best sense for you.

If you have questions regarding your portfolio, or if you are concerned about whether you are effectively managing risk through diversification, please feel free to reach out to me directly at bcarter@hapanowicz-associates.com.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.


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