Skip to Content
Advisor Insights

Why Diversification Pays in Rising Markets, Too

Broad and deep diversification is a prudent investment approach, no matter the market environment.

In last month's column, I explained--and showed graphically--the superiority of a portfolio designed to broadly and deeply diversify risk compared with two less well-diversified portfolios. That superiority stemmed, in part, from the notion that the well-diversified portfolio would be expected (but not guaranteed) to fall less in value in a market downturn than its two less diversified brethren.

However, my purpose in writing the column did not include disclosing the composition of the featured portfolios during any particular part of the momentous 17-month downturn in the stock market in 2007-2009. Portfolio A was simply a 60/40 allocation, while the values of the two other portfolios were based on feedback from many plan participants who I had counseled face-to-face during that stressful period of time. I didn't want a focus on the portfolio investments to the detriment of the big picture I was attempting to portray.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.