By Ken Faulkenberry
Diversification is the single most critical element of investment management. How an investor allocates investment funds to different asset categories or groups is called asset allocation, and is the most important fundamental of diversification. Asset allocation involves dividing an investment portfolio on a percentage basis among different categories of securities (international stocks, domestic [...]
Entries Tagged as 'asset groups'
Diversification – The Critical Element of Portfolio Management
August 8th, 2009 · 1 Comment · Investment Planning, Portfolio Management, Risk Management
By Ken Faulkenberry
Diversification is the single most important element of investment planning. Diversification is a portfolio strategy that reduces risk by combining different investments that are not correlated. The volatility (risk) of the portfolio is reduced because not all asset groups, industries, or stocks move together. The goal of diversification is to reduce risk.
Lack of [...]
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