This investment insight discusses why a diversified portfolio is your best defense against changing market conditions.

  • Smart ways to buffer portfolios against the slings and arrows of market upheaval are to properly diversify and maintain an investment discipline.
  • The asset classes in your portfolio should reflect your objectives, risk tolerance, and investment time horizon.
  • A well-diversified portfolio is not one that merely comprises a slapdash mix of stocks and bonds, but is one that is diversified within those asset classes at a refined, nuanced level.

Diversification had been the hallmark of intelligent, long-term investing for decades. Then came the global financial crisis and the seeming failure of diversification to protect portfolios, along with the perceived depreciation of all asset classes at once. It was understandable or perhaps even essential to question whether the old rules about having a well-diversified portfolio still apply. The answer? As much as ever.

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