Diversification has the potential

to help portfolios in rough times.

In any stock market climate, proper asset allocation matters. In a down market, you could argue that it matters more than anything else.  Did you have a well-diversified portfolio during the fall of 2008? That was a time when the importance of having a bond allocation and proper equity diversification really hit home. Nearly all investors were hit hard, but some were hit harder than others. What percentage of your portfolio was held in Treasuries (or cash) at that time?  What about the latest correction in 2010?

Wise asset allocation may help you as the market recovers. Yes, even diversified portfolios lost money at the end of 2008 and the start of 2009. Yet with rebalancing, these same portfolios took advantage of a rebounding market.  You might say there are two schools of thought when it comes to diversification and asset allocation – hands off, and hands on.  We believe in hands-on, active portfolio management!

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