An accomplished investment service professional, Frederick Eugene “Fritz” Mowery draws on more than three decades of professional experience. As president and chief investment officer of Mowery Capital Management, LLC, in Dallas, Fritz Mowery manages clients’ finances and assists in portfolio building by ensuring all core asset classes are covered in order to provide complete diversification.
Diversification is a risk-mitigating strategy that involves investing in various categories of assets. Sometimes, balancing a diversified portfolio is complicated, and many investors are not sure what number of asset categories is adequate. Definitely, investing in too many assets is not advisable as it makes the portfolio less manageable. Limiting the number of different investments to about 20 to 30 enables sufficient time and resources to manage the investments efficiently.
The point of diversification is to accomodate unanticipated market situations. To accomplish this, having just two different asset types may be insufficient. While there is no specific number regarding the adequate number of investments for an efficiently diversified portfolio, many experts believe an investor can attain optimal portfolio diversification with 15 to 20 diversified stocks across various industries. However, as a portfolio becomes diversified, it reaches a point where adding more assets makes no difference.
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