| Diversification is the Key to Reducing Investment Risk.
There are two ways of reducing investment risk. The first is to invest in low risk/low reward investments such as money funds and short-term bond funds. The second way, and the way Spectrum prefers, is to diversify among several investment methods which all have the ability to produce attractive returns, but are unrelated to each other in terms of what drives performance. By selectively combining Strategies, portfolios can be created for each client based on their individual investment objectives and risk tolerance.
Each Spectrum strategy is risk rated on a scale of 1 to 5, where 1 represents little risk, such as investing in money funds, and 5 represents the risk comparable to investing in a buy-and-hold, aggressive growth strategy. By allocating assets within these risk parameters, clients are able to build risk adjusted portfolios designed to match their tolerance of potential losses and investment objective.
|
