Diversify Your Assets
June 2, 2022
Are you looking for ways to prepare for your retirement if a recession comes along? Diversifying your assets is just one of the ways you can help do this.
You’ve probably heard the saying “Don’t put all your eggs in one basket.” That’s essentially the meaning behind diversification. When you diversify your assets, you help reduce your risk of losing everything if one asset class bottoms out.
Each year, Northwestern Mutual stitches together something called “the quilt,” a color-coded chart that ranks various asset classes by their total return in a given year, ranked from highest to lowest.1 You can find an example here. This example illustrates what asset diversification looks like and how it changes. You can see the top-performing asset class continues to change throughout the years. This is the reason you can’t bank on just one to provide continued success.
The best thing you can do is have someone on your team who can analyze your portfolio and determine the optimal asset allocation strategy for you. Your financial future is too important to leave to chance.
Feel free to contact us with any financial questions you have about how asset diversification can be a benefit for you!
1. https://www.northwesternmutual.com/life-and-money/2021-could-mark-a-big-shift-in-market-leadership/