Francesco Coccimiglio.
As the US Securities and Exchange Commission (SEC) explains in one of its guides, “The practice of spreading money among different investments to reduce risk is known as diversification. By picking the right group of investments, you may be able to limit your losses and reduce the fluctuations of investment returns without sacrificing too much potential gain.” One of the reasons diversification works is because of asset correlation, meaning that properly constructed portfolios contain investments that respond differently to market conditions. For example, economic factors that affect stocks typically have little or no impact on bonds, Francesco Coccimiglio explains, adding, “Correlation is one of the first things investors should consider when deciding on the asset mix. Holding a large number of positions is not enough – they have to be investments that move independently of each other, ideally in opposite directions."
Along with determining correlation, investors should consider diversifying both across and within asset classes. In the first case, it means having a carefully weighted selection of two or more categories, the most popular ones being stocks, bonds, commodities, and cash. As for diversifying within asset classes, it can be achieved by mixing up industries, investing in companies of varying sizes, or including different bond maturities and issuers. Other strategies to consider are gaining exposure to foreign stocks and exploring atypical options, such as real estate investment trusts (REITs). Francesco Coccimiglio concludes, “A diversified portfolio is the bedrock of any investment strategy aimed at building up wealth over time. How investors approach the task will depend on their financial goals, risk tolerance, and time horizon, but they should remember that diversification will ensure success only when combined with a disciplined approach to investing and consistent oversight.”
Francesco Coccimiglio, a Certified Investment Manager (CIM®) based in Toronto, Canada, has dedicated the past 13 years to putting his clients in control of their financial future through creative wealth-building strategies. He draws on his considerable experience in the banking industry, where he has built expertise in securities, mutual funds, risk management, and investment advisory services. Committed to integrity and transparency, Francesco Coccimiglio is a firm believer in placing clients’ interests first while also educating them on critical financial matters.
Francesco Coccimiglio – Canada’s Leading Certified Investment Manager (CIM): http://www.FrancescoCoccimiglioNews.com
Francesco Coccimiglio on Strategies to Manage Investment Risk: https://news.yahoo.com/francesco-coccimiglio-strategies-manage-investment-134100030.html
Francesco Coccimiglio on the Advantages of Opting for an Independent Financial Advisor over a Bank Advisor: https://finance.yahoo.com/news/francesco-coccimiglio-advantages-opting-independent-123200646.html
Contact Info:
Name: Francesco Coccimiglio
Email: Send Email
Organization: Hampton Securities Limited
Phone: 416-872-8715
Website: http://francescococcimiglio.com
Release ID: 88954568