Most of us have heard the saying: “Don’t put all of your eggs in one basket.” For years, financial experts have urged investors to spread their money across different types of asset classes—such as stocks, bonds and cash—in order to help reduce risk and enhance long-term returns.
Developing an asset allocation strategy requires an in-depth statistical analysis of asset class performance. While this process begins with an analysis of historic risk and return results, it shouldn’t end there. The capital markets are constantly evolving, and what occurred yesterday, might not happen tomorrow. With many different variables and strategies impacting diversification decisions, many investors may find it difficult to chart an appropriate course.
Michael Jappell CRPC
<p>Michael J. Jappell, CRPC is a Smith Barney Financial Advisor and Chartered Retirement Planning Counselor, located in Garden City, N.Y. He may be reached at (516) 227-2808 or visit www.fa.smithbarney.com/jappell.</p>