The Key Is Diversification
- Asset class diversification can result in an increase in returns and potentially lower volatility (measured by standard deviation).
- Investors who diversify are best positioned to experience higher performance over time. Riskier asset classes (especially small cap and value stocks) have been rewarded over time by higher expected returns.
- Incorporating fixed income investments into an otherwise diversified portfolio can help reduce the volatility of your investments.
Investing involves risk including the possible loss of principal. No guarantees of investment success can be offered or that a client's goals and objectives will be achieved. Investments will fluctuate and there will be periods where the investments may be worth less than the initial purchase value.