These would include: an investor cannot pick the return but can only choose the level of risk, One cannot accurately predict the market, Diversification lowers risk, Invest to be on the Efficient Frontier and low cost investments can improve performance vs. high costs.
To help ensure success, we pay attention to things like proper diversification and risk.
This calls for investors to revisit their portfolio strategies to incorporate a wider range of asset classes and sectors to help provide the diversification and risk adjusted return potential that is needed to navigate these uncertain and volatile markets.
And investors tend to frown on companies with too many eggs in one shopping basket--less diversification means more risk.
Many investors in the Asian markets prefer to invest offshore for risk diversification, or are forced to look overseas due to a lack of experienced and reputable wealth managers in their home markets, according to the report.
So much for diversification of manager risk.
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People familiar with the matter point to strategic reasons for the shift: risk diversification after Foxconn's manufacturing glitches last year with the iPhone 5 that resulted in scratches on the metal casings, and Apple's decision to expand its product lines amid growing competition from Samsung Electronics Co.
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In other words, global diversification helps to improve the risk-adjusted performance of the portfolio.
If the best equity fund manager is overweight Brazil and the best fixed income manager is overweight Brazil, there is no country diversification in a market where risk taken on the wrong country can hurt a portfolio.
The bottom line: The resumption of easy money policy by the Federal Reserve in the aftermath of the 2008 financial crisis has re-affirmed and broadened the positive correlation of different asset categories, undermining the effectiveness of asset diversification strategy in reducing market risk.
Mr Swensen argues that diversification is a better form of risk control than liquidity.
New lessons have been learned in the past few months about diversification and the management of credit risk.
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Third: Your ability to withstand market volatility should determine what percentage of stocks you should own and what degree of diversification is appropriate to mitigate concentration risk.
Through diversification, he would enjoy less risk, and he'd have much greater liquidity than he had with his business, but he still expected 20% returns, at a time when returns on sovereign euro bonds are below 4%.
Ten-year Treasury notes may not be giving you enough comparative diversification benefits to justify their potential downside risk.
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The idea here is that having a basket of funds or assets enables a more laissez-faire approach, since risk is being managed through diversification.
Gold, said the WGC, offers portfolio diversification since it lacks the credit and counterparty risk of other investments.
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Diversification among different asset classes helps reduce the risk of a large loss.
This principle of diversification works in increasing returns and in reducing risk.
In other words, not only can you find low-correlation sector pairings to provide true diversification, they allow for a granularity in risk management that is unavailable in traditional equity strategies.
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The common assumption that has prevailed among money managers over time is that asset allocation among stocks, bonds and cash helps to mitigate the risk of suffering market losses through diversification.
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Understand your current portfolio, i.e. what is the expected return, what is the level of risk and what is the level of diversification.
Barrick has four new low-cost mines coming on stream over the next four years, and Nystrom says Barrick's execution risk is low because of ownership of several mines, and that political risk is also mitigated because of geographic diversification.
Chiappetta notes more investors are using exchange-traded funds to mitigate risk through the funds' built-in diversification.
The organization maintains that some gold in a portfolio offers a diversification that can help investors at times when tail-risk events hurt other markets.
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The new securities would possess a unique combination of attributes, including inflation protection, freedom from default risk, freedom from all taxes, ultimate diversification, and upside potential based upon future improvements in economic policy.
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At the beginning of the bull market, the diversification provided by a fund was a good way of reducing risk.
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The lesson is that diversification might help smooth out routine fluctuations, but under extreme conditions your risk level is likely to depend very much on the overall economic exposure of your holdings.
Much of Agilent's risk management, and future investment, rests in product and geographic diversification.
Diversification and regular rebalancing may decrease the impact of market volatility, but the risk of losing money will still exist.
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