Diversification is good for an investment portfolio, right? That’s the conventional wisdom, but can your investments be too diversified? As the saying goes, too much of anything isn’t good and this principle applies to diversification, just as it does with virtually everything else in life.
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It’s that time of year again. The dreaded New Year’s resolutions, annual reviews and goal setting season. You know what I’m talking about.
The Department of Labor (DOL) recently finalized its long-awaited fiduciary rules. The rules mandate that all financial advisors who provide advice on a client’s retirement accounts act in the best interests of their client. The new rules are similar to those already administered by the DOL pertaining to advice provided for 401(k) plans and other qualified retirement plans. Clients will see the greatest impact of these new rules with regard to their IRA accounts, but the changes will likely impact their overall relationship with their financial advisors as well.
No one likes to make sacrifices. This is especially true when it comes to shopping or buying something you want. But making sacrifices in the short term can have big long-term gains that can make the sacrifices you made totally worth it. Want to know how you can build wealth for the future?
Now that the long-awaited Brexit referendum is over and it appears the UK will leave the European Union (EU), the prognosticators are out in force, their crystal balls glowing like searchlights on a dark night. Ironically, many who confidently predicted British voters would reject Brexit are now sure they know what the future holds.
As an investor it’s important that you periodically rebalance your portfolio. This is the process by which you make sure your portfolio allocation stays in approximate alignment with your original diversification strategy. In other words, it’s a reevaluation of your investments to ensure they’re still meeting your financial goals. There are different ways to rebalance your portfolio, based on life events and personal needs.
Smart beta — also known as advanced beta, alternative beta or strategy indices — isn’t a new investment strategy. But lesser-known strategies have a way of surfacing and gaining credibility during times of market stagnation, volatility or other conditions of uncertainty. Such was the case during the stock market meltdown of 2007–2009. In such a market, investment managers were looking to reduce risk, rather than just purely pursuing return.
One of the biggest challenges most of us face in a world connected by technology is that it’s so easy for your financial information to become available to everyone else. Your financial information can be used to make fraudulent purchases, open credit accounts in your name, or take other actions without your consent.
When you have $1,000 or less to invest, there may seem to be only a few options. But the good news is some of the wealthiest investors in the world started somewhere. And though it doesn’t get a whole lot of publicity, there are actually numerous options available for your small amount of money.
Searching for the right financial advisor can be a daunting and frustrating task. There are issues regarding the competence and qualifications of the advisor. These are critical, but we cover these issues in another article.