Diversify Your Portfolio

Due to the instability of the market, it's a good idea to seek the advice of an LBS Financial specialist and carefully assess your portfolio risk. One time-tested way to balance risk is to diversify your portfolio. While it can't guarantee success, this risk management technique mixes a wide variety of investments within a portfolio, reducing dependence on one's investment performance.

Market sector or industry - Over-dependence on any one industry can hurt a portfolio's performance. Instead of being a niche investor who only invests in high-tech stocks, for instance, consider buying securities that are not affected by the same variables. Entertainment companies, utilities, health industry, grocery stores and airlines, for example, are completely different businesses. At any given time, one or more of these industries might be performing better than the others. Sector diversification can even be found when investing in a company with varied product lines. For example, Proctor & Gamble is usually thought of as a household product manufacturer, but its lines include healthcare, paper, beauty, cleaning products and food. By buying stock in extremely diversified companies, you piggyback on their strategic plan to compensate for economic fluctuations.

Investment categories - Hopefully, you'll reconsider putting all your eggs in one basket. The low-risk side of your portfolio should balance the high-risk side. Bonds tend to do well when stocks don't. Treasuries are one of the safest investments around.

Consistent investing - Investing consistently throughout the year also helps with diversification. By buying over several months or at a certain amount each month, helps you ride out market fluctuations; purchasing some bargains when the market is down and investing regularly each month.

Tom Corrado, our financial consultant, will help you identify your risk tolerance, investment strategy and assist with diversifying your portfolio. With all the products of a full service brokerage (stocks, mutual funds, bonds), your portfolio has the ability to be balanced and diversified. In addition to helping you select a variety of investments that can react differently to changing market conditions, they'll also consider your ability to tolerate risk and your investment time horizon. Call 800.527.3328, ext.  4904 to make an appointment with Tom Corrado today.

Securities and Insurance products offered through LPL Financial and its affiliates. Member FINRA/SIPC.

*Mutual Funds, annuities and other investments through LPL Financial are NOT deposits, are NOT insured by the FDIC, NCUSIF or any other regulatory agency, are not obligations of or guaranteed by LBS Financial Credit Union, or any other affiliated entity, are subject to investment risk including loss of principal and are subject to fluctuating rates of return. LPL Financial is not affiliated with LBS Financial Credit Union. Tom Corrado is registered to discuss and transact securities business to residents of the state of CA.


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