Why diversify investments?

Why diversify investments?

November 15, 2020

We believe in diversification of assets across different types and sizes of companies and location. When US stocks are going down, international stocks might provide investor with higher returns at that time. 

Look at the colorful and data filled periodic table of investment returns found in our previous blog

Check out the Dimensional Fund Advisor insights. They are an empirically based investment company founded by Nobel Laureates Fama and French, who are still doing a lot of academic research on investing. In particular, start with Why Should You Diversify? (a four-minute read).

Explore what’s called the Sharpe ratio and how to reduce portfolio deviation by combining uncorrelated assets.

Diversification does not ensure a profit or protect against a loss but it put eggs in different baskets and ensures you a smoother ride over time.