Chart of the Month
The average stock fell a lot more than the index it’s in
In periods of heightened market volatility, the benefit of having a well diversified portfolio of equities with similar characteristics is easy to discern. Diversification, while unpopular during times of higher highs, is a prudent idea that may allow portfolios to weather volatility storms and guard against market lows. There is no such thing as certainty. Different assets perform differently during different time periods, so owning a diverse portfolio is advantageous. Individual securities that have had outstanding recent returns should be scrutinized rather than extrapolated into the future – these same fantastic runs can quickly turn to erase the majority, if not all, of their returns.