By and large, most investors are more concerned about losing money rather than making money. They don’t want to see the value of their investments fall. Its a common trait in most people.
And therein lies the dilemma for Advisers. How to protect the Client’s savings while at the same time get a good return?
The answer is Diversification of assets. Diversify the investments over many funds, many sectors, and many asset classes.
Studies have shown that a diversified portfolio doesn’t always sit at the top of returns but there again it is also very seldom at the bottom of the heap.
A diversified portfolio designed to meet each investors specific needs in line with their risk profile will help clients avoid the downside risk of a “non-diversified” portfolio.