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Friday, October 23, 2020

4 Simple Tips for Advisors on How to Make Portfolio Diversification Easier

  1. Know your client: Ask about risk aversion and financial goals. The portfolio diversification should be based on the risk aversion and financial goals of a client.
  2. Know your funds: select the best suited funds for your client based on their risk/return profile. Managing cost of the funds, tax status can play an important role in the diversification.
  3. Spread your investments: Do not put all of your money into one security. Research different options (mutual funds, stocks, trusts and equities), and spread your wealth evenly.
  4. Take index and bond funds into consideration: Adding index and fixed-income funds to the portfolio can bring some wonderful long-term diversification to it, as they’re hedging your portfolio against volatility and uncertainty of the market.

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    Before I take any next step could you please give me the range of costs for your services?

    Thank you.

    Frederick S. Fox
    Vice President
    Merrill Lynch

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