A Properly Invested Portfolio Suffers Little Loss

It is well established that little if any losses will occur when portfolios are properly invested. This is accomplished by having an asset allocated and diversified portfolio. Proper allocation and diversification of an investor’s assets are the preeminent duties of your financial advisor. Diversification is the hallmark of suitability for investors to limit risk. This means having investments in different asset classes such as stocks, bonds and commodities, as well as in different market sectors such as different market sectors such as technology, health care, financials and energy.

When brokers or financial advisors fail to properly diversify a customer’s portfolio resulting in losses, these claims are filed with the Financial Industry Regulatory Authority (FINRA) for the failure to make suitable recommendations. Suitability claims are by far the most common type of claims that go to arbitration. Unsuitable recommendations can result in over concentration of an investment portfolio in one particular asset class, security or market sector dramatically increasing the risk of loss.

If you have suffered investment losses caused by the failure to diversify, please contact our securities law firm for a confidential consultation at 1-800-259-9010.

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