Overconcentration occurs when a financial advisor or stockbroker recommends that an investor place a disproportionally large amount of the investor’s assets in a single stock, 行业, 或行业. Overconcentration or failure to diversify often leads to significant financial losses when that product 或行业 declines.
它是, 因此, part of a broker’s responsibility toward investors to ensure that investors’ portfolios contain investments in a variety of products across different asset classes and industries. This diversification should align as well with the investor’s investment objectives and financial circumstances.
Failure to diversify can result from both intentional wrongdoings like fraud, as well as outright negligence by your broker or financial advisor.
Proper asset allocation is necessary to balance investment risk and reward according to the customer’s particular investment objectives. Asset allocation is accomplished by apportioning an investment portfolio among the three main classes of investment: equities, fixed income and cash equivalents. 一般, a portfolio that has a higher concentration in equities or stocks is riskier than a portfolio that holds mostly investment grade bonds. 因此, it would be improper for a conservative investor to be assigned to a portfolio that has a heavy concentration in stocks or equities.
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