Achieve a true diversification benefit in your investment portfolio with these tips

Selecting asset classes for your portfolio may be the most important decision you make when it comes to achieving your financial goals. Academic studies, such as Brinson, Hood, and Beebower’s Determinants of Portfolio Performance, show that portfolio returns are dominated by asset allocation decisions. Asset allocation is designed, predominantly, for diversification — which is used as a risk mitigation strategy. In other words, the goal is to combine assets with low correlations, which should…

Selecting asset classes for your portfolio may be the most important decision you make when it comes to achieving your financial goals. Academic studies, such as Brinson, Hood, and Beebower’s Determinants of Portfolio Performance, show that portfolio returns are dominated by asset allocation decisions. Asset allocation is designed, predominantly, for diversification — which is used as a risk mitigation strategy. In other words, the goal is to combine assets with low correlations, which should…

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