Frederick Eugene “Fritz” Mowery serves as president and chief investment officer of Mowery Capital Management, LLC, a Dallas-based investment advisory firm. In this position, Fritz Mowery manages both equity and fixed income portfolios, providing diversification throughout key asset classes.
A risk-mitigation technique, portfolio diversification is the process of allocating investments across diverse industries, financial instruments, and other categories. Its purpose is to maximize returns through investment in multiple categories of assets that should react differently to a single event.
One element of successful investing is understanding how to balance risk with comfort level over a given time. Diversification balances risk and reward. When investors diversify their portfolio, their investments in each type of asset are limited and volatility is minimized. The reduced volatility does not guarantee against loss, but can help investors attain long-range financial goals.
A diversified portfolio should include domestic stocks, international stocks, short-term investments, and bonds. Additional components can include real estate funds, asset allocation funds, sector funds, and commodity-based funds.
