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DIVERSIFICATION Workshop |
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Some investors are tempted to put all their eggs in one basket. Too often, they wind up learning the hard way about the value of diversification. If only they had known a little more about the benefits of diversification, they may have realized that trying a short cut just wasn’t the way to go.
Enterprise Fund Distributors provides you with this Diversification Workshop to help you further understand the concept of diversification:
- Diversification: Fact or Fiction?
- Why Diversify?
- Getting Started
What Is Diversification?
 In simple terms, diversification is the process of placing your money in more than one type of mutual fund or investment, potentially offsetting the loss of one investment with the gain in another. This, in effect, allows you to reduce, or spread, your risk across your investments. For example, if you've placed all of your money in a stock mutual fund and the value of the fund falls, you may take a considerable loss if you need to withdraw your money while the value is down. However, if you are properly diversified with a portfolio containing other types of investments, such as bonds or stable investments, the impact of the decline in your stock mutual fund on your total portfolio may be minimized, especially if your other investments have increased in value.
Also, be sure to discuss diversification with your financial advisor to see where it fits into your short- and long-term investment strategy. And please remember, diversification does not assure a profit nor protect against loss.
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