Download Managing Risk Through Diversification Video Transcript

“Managing Risk Through Diversification” Video Transcript
Sameer Samana
Global Strategist
I suppose some people tend to think of “risk” as something to be avoided when possible. But that’s not
really the case when it comes to investing. As an investment strategist, I’ve really taken the time to
analyze long-term market trends, and it’s given me a real appreciation for the concept of risk.
Risk can never be eliminated entirely. It’s just a part of investing. But it does need to be managed
properly, or it can undermine your investment strategy. Taking on too much risk can leave you
vulnerable to losses. Taking on too little risk can limit your earnings potential. Many investors struggle
with finding the right balance.
But, there is one strategy that can potentially build and help to preserve wealth, while at the same time
managing risk. And that’s through diversification. Historically, I’ve found that individual stock prices
can vary widely over time. But when investors retain a diverse mix of assets in their portfolios two
things can happen: One: portfolios can exhibit lower volatility. Two: they have the potential for better
returns.
Now, diversification does not guarantee a profit or protect against losses. But if finding the right
balance between risk and reward is important to you, remember... A well-diversified portfolio cannot
only be the key to managing risk, but it could help to increase the chances of meeting your long-term
financial goals. And really, isn’t achieving your goals the whole point of investing?
To learn more about how you can benefit from diversification, please download our special report:
“Using diversification to help manage risk and return.”
All investing involves some degree of risk, whether it is associated with market volatility, purchasing power or a
specific security. Equity securities are more volatile than bonds and subject to greater risks. Investments in
foreign securities entail special risks such as currency, political, economic, and market risks. These risks are
heightened in emerging markets. Investing in commodities is not suitable for all investors. Exposure to the
commodities markets may subject an investment to greater share price volatility than an investment in traditional
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Emerging-Market Equity: MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is
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