McMillion Financial Group
your partner in retirement planning
your partner in retirement planning
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The Importance of Diversification
Diversifying is placing your eggs into more than one basket. By doing so, you reduce the chances
of having all your assets in one investment that performs poorly.
The potential benefits of diversification are illustrated in the graph shown here:
In this scenario, an investor holding Security A experiences fluctuation in the value of his or her
investment. Likewise, an investor holding Security B experiences the same kind of volatility. By
diversifying their portfolios, including both shares of Security A and Security B in equal amounts,
these investors have the potential to effectively balance their risk. Because downward
movements in one security can be offset by upward movements in another, overall portfolio
volatility is lessened.
Experts agree that the manner in which you allocate your assets among stocks and bonds is the
portfolio's performance. But the growth of the world's economies has fostered a multitude of
investment options, both domestic and international, from which to choose. And, there are
currently thousands of mutual funds available that package these securities together in endless
combinations making it difficult for the average investor to select and maintain the combination of
investments that has one key to best potential for growth.
Diversification does not assure against market loss. Investments in foreign markets may involve risks such as
foreign currency exchange rate fluctuations, political and economic conditions and foreign taxation.
Diversifying is placing your eggs into more than one basket. By doing so, you reduce the chances
of having all your assets in one investment that performs poorly.
The potential benefits of diversification are illustrated in the graph shown here:
In this scenario, an investor holding Security A experiences fluctuation in the value of his or her
investment. Likewise, an investor holding Security B experiences the same kind of volatility. By
diversifying their portfolios, including both shares of Security A and Security B in equal amounts,
these investors have the potential to effectively balance their risk. Because downward
movements in one security can be offset by upward movements in another, overall portfolio
volatility is lessened.
Experts agree that the manner in which you allocate your assets among stocks and bonds is the
portfolio's performance. But the growth of the world's economies has fostered a multitude of
investment options, both domestic and international, from which to choose. And, there are
currently thousands of mutual funds available that package these securities together in endless
combinations making it difficult for the average investor to select and maintain the combination of
investments that has one key to best potential for growth.
Diversification does not assure against market loss. Investments in foreign markets may involve risks such as
foreign currency exchange rate fluctuations, political and economic conditions and foreign taxation.
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Copyright 2006 McMillion Financial Group LLC. All rights reserved. Revised July 12, 2019.
_______________________________________________________________________________
Copyright 2006 McMillion Financial Group LLC. All rights reserved. Revised July 12, 2019.
_______________________________________________________________________________
Branch Office: 111 2nd Ave NE, Suite 913B, St. Petersburg FL 33701
Phone: (727) 456-1518 E-mail: kmcmillion@mcmillionfinancialgroup.com
McMillion Financial Group LLC is not an affiliate of Fortune Financial Services Inc.
Phone: (727) 456-1518 E-mail: kmcmillion@mcmillionfinancialgroup.com
McMillion Financial Group LLC is not an affiliate of Fortune Financial Services Inc.