Seeking Alpha

The Asset Allocator: Why We Diversify (Podcast)

by: SA For FAs
SA For FAs
Senior Editor, FA Content
Summary

Protecting against the downside is the first step in investing.

Ownership of multiple securities lowers portfolio risk because of the smoothing effect of stock prices moving up and down at different times.

Because we cannot predict the future, we should plan our finances in such a way as to avoid calamitous outcomes.

Listen on the go! Subscribe to the SA for FAs podcast on iTunes, Stitcher and SoundCloud (click the highlighted links).

Protecting against the downside is the first step in investing.

This podcast (4:16) argues that advisors should encourage clients to reduce risk and aspire to steady returns as the best means of attaining long-term solvency and stability in their financial lives.