The sermons of diversification preachers are about as old as that tale of the buttonwood tree on Wall Street. But in case some of your clients aren't persuaded, consider the performance data in the chart titled "Pick Your Period," (below).
For instance, from 2001 to 2010, a diversified portfolio returned an average of 5.6% annually vs. 1.4% for a portfolio consisting only of large-cap U.S. stocks. Moreover, the volatility of the stock portfolio was 21.2% vs. 15.1% for the multi-asset portfolio. The goal of building a multiasset diversified portfolio is to create better risk-adjusted performance for the investor.
Register or login for access to this item and much more
All Financial Planning content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access