ATLANTA, GA, July 21, 2010
/24-7PressRelease/ -- When investing, don't rely on a single investment to pursue your financial goals. Rather, build your portfolio with a selection of investments designed to work together.
This process of dividing your investment dollars among different types of investments is called diversification. The theory is based on the concept that asset classes tend to react differently to market conditions. With a diversified portfolio of investments, you may help reduce the risk that a loss in one asset class will drag down your entire portfolio. Diversification will not guarantee you from loss, but diversifying will help against it.
Diversity Within and Among Asset Classes
To diversify your portfolio, select a mix of investments that are not too similar but that will pursue your overall objective adequately. First, try diversifying among different asset classes, such as stocks, bonds, and money market accounts.
Second, consider diversifying within an asset class, such as stocks. For example, if your primary objective is growth, you might choose to invest the majority of your money in "blue-chip" stocks and small-capitalization stocks.
You may also have the option of diversifying your portfolio with foreign investments. Foreign investments make up more than half of the world's market, so if you're not investing overseas, you may be limiting your opportunities. Because U.S. markets may not move in lockstep with some overseas markets, foreign investments may be a good way to diversify.
Foreign investing involves additional risks, including the risk of currency fluctuations, political upheavals, and higher taxation. Investors should carefully consider their ability to take on such risks before investing overseas.
Sometimes More Is Too Much
Diversification is often described as putting your eggs in different baskets. The combination of "baskets" you choose depends on your goals, time frame, and risk tolerance. Long-term investors may choose more stocks, while shorter-term investors may select a more conservative mix weighted toward bonds and money market accounts.
No matter what combination you choose, make sure investment plays a specific role in your overall objective. When investing, more is not always better, strategic diversification is the key.
About Stash Graham
Stash is an Investment Executive with independent brokerage firm, J.P. Turner & Company, LLC (Member SIPC), and a second generation financial professional who utilizes his market and economic analysis expertise to help people understand their finances. Based in Scottsdale, Arizona, Stash provides investment guidance to individuals and businesses located in the Tampa and Phoenix areas. Stash participates in a weekly financial segment on NewsTalk 820 AM reaching listeners in Tampa Bay and Western Florida. Prior to joining J.P. Turner, Stash served as Vice President and Market Analyst for a financial firm in Tampa. He holds a master's degree in business administration with a focus in finance, from La Salle University in Philadelphia. He can be reached at (480) 477-6317 or at SGraham@JPTurner.com.
Source: Standard & Poor's Financial Communications
J.P. Turner & Company, LLC, is a full-service independent investment banking and securities brokerage firm headquartered in Atlanta with some 180 branch offices nationwide. Its affiliate company, J.P. Turner & Company Capital Management, LLC, offers investment planning and advisory services. J.P. Turner was founded in 1997 by Bill Mello and Tim McAfee. Mello and McAfee have assembled a strong leadership team of seasoned financial brokers and advisors who, like themselves, truly understand the challenges faced by independent representatives in the field. The company is a member of SIPC and the National Investment Banking Association. J.P. Turner is consistently voted one of the top 50 independent broker/dealers by Investment News and one of the top broker-dealers by Financial Advisor. For additional information on J.P. Turner & Company visit http://www.jpturner.com. For information on J.P. Turner & Company Capital Management visit http://www.jpturnercm.com.
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