Long-term investors advised to diversify
Concerns about the credit crisis, inflation and oil prices will continue into 2008, but shouldn’t deter investors, according to stockbrokerage Edward Jones.
Consumers should meet with a financial adviser early next year to review their portfolio, Edward Jones has advised. Investors should aim for a diversified portfolio of quality holdings and need a plan to stay invested during choppy markets, said Kate Warne, market strategist at Edward Jones.
She added: “If you own individual shares, review the financial services shares you own to evaluate their suitability in your portfolio. We suggest selling those companies whose businesses are not well-diversified and reducing the proportion of financial services in your equity portfolio to no more than 17% if needed to remain properly diversified.
“Instead of making specific predictions, we believe the best investment approach is to build a portfolio that includes a wide variety of quality investments. Some will do well, while others will do poorly over the short term. Regardless, a well-diversified portfolio of quality investments has historically grown over time with less volatility.”