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A well diversified investment portfolio is a key requirement for long-term investing success.

Diversification is important. But sometimes too much diversification can negatively impact portfolio performance. It can be a fine line in getting it right.

Today, a look at indications your portfolio is overly diversified. 

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Compare Performance to Peers

On 05/18/2011, in Investment Strategies, by Jordan Wilson

If you create a portfolio of individual stocks and bonds, it may be unique to you.

Creating a benchmark may take a little work.

If your invest in index funds, you will be able to easily find a relevant benchmark.

But I suggest you do not stop there in comparing your portfolio performance.

A great way to assess fund performance is to also compare results against the fund’s peers. 

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Risk-Return in Asset Subclasses

On 01/31/2011, in Investment Strategies, by Jordan Wilson

Asset classes have general risk-return characteristics.

Cash is low risk, low return. Fixed income is riskier and has higher returns than cash. Common shares have the highest risk and expected return of the core asst classes.

But you need to exercise care when selecting investments within a specific asset class. There can be significant fluctuations in risk-return profiles between investment options in each class.

We will look at a few examples today.

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Acceptable and Unacceptable Assets

On 01/29/2011, in Investment Strategies, by Jordan Wilson

Once you have completed your investor profile, the next step is to determine acceptable investment options.

What asset classes and sub-classes to include in or exclude from your investment universe.

Your unique profile and risk tolerance should determine which assets to invest in.

Today I will offer a few thoughts on things you might consider.  

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Previously I have written about potential problems in diversifying one’s portfolio with funds.

The Wall Street Journal nicely illustrates three common concerns in an article today.

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Mutual Fund Style Drift

On 10/11/2010, in Mutual Funds, by Jordan Wilson

Asset allocation is a cornerstone of successful investing.

As the name indicates, it involves investing one’s capital among different asset classes and investment styles. If you allocate incorrrectly, you reduce the probability of achieving your investment goals.

So how does investment style drift figure into this?

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Mutual Fund Window Dressing

On 10/07/2010, in Mutual Funds, by Jordan Wilson

When analyzing mutual funds, reviewing fund holdings is useful to ensure adequate diversification within a fund, as well as between different funds.

But you need to be certain that the holdings you review accurately reflect the fund’s investment strategy. If they do not, it may be due to the presence of window dressing.

Today we will take a look at this topic.

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An Introduction to Mutual Funds

On 08/23/2010, in Mutual Funds, by Jordan Wilson

Today we will begin an examination of mutual funds.

Why my interest in writing about mutual funds?

First, mutual funds are extremely popular and there are many funds in existence. So whether you intend to or not, you will come across funds in your investment travels.  

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