"Don't Put All Your Eggs in One Basket"
Modern Portfolio Theory (MPT) by Harry Markowitz, who won the Noble Prize in Economics in 1990 for his groundbreaking research on risk/return, states that the risk of any investment can be reduced and/or performance increase by forming a portfolio of diverse and non-correlated assets. (See Portfolio Selection by Harry Markowitz - The Journal of Finance, Vol. 7, No. 1. (Mar. 1952), pp. 77-91.)
Simply put, a truly diversified portfolio contains not only a range of different asset types, but also assets that have low correlation to one another.
NUA Advisors utilizes the MPT and provides guidance and insight on how to achieve independence from market volatility. We advise clients on how to assemble a truly diversified portfolio, with the premise that a truly diversified portfolio contains not only a range of different asset types, but also assets that have low correlation to one another.
Constructing a portfolio this way will reduce the likelihood that a portfolio's assets will move in tandem, which can be especially important when the broader markets may be down and diversification may be most needed.
