Mastering Diversification: A Guide to Smarter Investing

Diversification is a word often used when it comes to your investments. But what does it really mean? At Oppenheimer, it means working with you to truly understand your investment objectives and risk tolerance, as well as recommending a portfolio that has the right mix of assets.

Simply put, Oppenheimer financial professionals want to help you avoid putting all your eggs in one basket. This is the basic principle behind asset allocation, and your portfolio diversification. There are several facets to building a diversified portfolio. The most common way to think about it is splitting your investment into categories such as bonds, stocks, and cash.

1. Creating a tailored investment plan. 

Spend time with your financial professional to define your goals and time frame, and take stock of your capacity and tolerance for risk.

2. Investing at the appropriate level of risk.

Your Oppenheimer financial professional can help you choose a mix of stocks, bonds, and short-term investments that you feel comfortable with and considered appropriate for your goals. Historically, stocks have a higher potential for growth, and holding them for longer time periods could help smooth out volatility. However, if you'll need the money in the near term—or if the prospect of losing money makes you feel uneasy—you may want to discuss a higher allocation to what are considered less volatile investments such as bonds or short-term investments.

3. Schedule check-ups. 

Set regular times to discuss your investments with your Oppenheimer financial professional for:

• Monitoring – Check-ups are a time to evaluate your investments periodically for changes in strategy, relative performance, and risk.
• Rebalancing – Examine your investment mix to maintain the risk level you are comfortable with and make corrections based on market performance.

Working to achieve your long-term goals is greatly supported by working with a financial professional to balance risk and reward. Selecting the right mix of investments and then periodically rebalancing and monitoring your choices can make a big difference in your long-term outcome.

Call your Oppenheimer financial professional today to further discuss diversification. If you don’t have one, you can find one in your local area by clicking here.