The Importance of Portfolio Diversification

The Coronavirus market crash of 2020 shows the importance of portfolio diversification. Get help recovering your stock losses by contacting a qualified investment loss lawyer.

It has long been critical that financial advisors ensure that their clients’ investment portfolios are diversified. But, in light of the Coronavirus market crash that occurred in March 2020, the importance has become dramatically clear. This lack of diversification across asset classes, geographic regions, securities types, and sectors has caused investors to experience substantial and unexpected losses.

If you have endured such losses, you may be able to recover them if your financial advisor or brokerage firm has breached their duty of care due to a lack of portfolio diversification. A highly experienced investment loss lawyer at Wolper Law Firm, P.A. could help you figure out what options are available to you during this trying time.

Why Asset Allocation and Portfolio Diversification Are Critical Amid the Coronavirus Market Crash

Proper asset allocation and diversification are necessary if you want your investments to withstand market volatility. This means that your accounts should be diversified across geographic regions, asset classes, sectors, securities, and investment strategies.

Unfortunately, too many financial advisors have failed to prioritize portfolio diversification and often fail to give their clients’ accounts the attention they deserve.

In recent years, for example, many accounts have become overcentrated with equities. This lack of diversification has already led to disproportionate and unnecessary investment losses, often striking those who can not afford to endure such a loss. If this sounds like your recent experience, you may have legal recourse available to you.

A highly qualified investment loss lawyer at our firm can review the circumstances of your case to determine whether your broker failed to handle your accounts appropriately.

What You Can Do If You Suffered Stock Losses Due to Lack of Portfolio Diversification

There are several legal options available to those who have endured portfolio investment losses in the wake of the Coronavirus market crash. One of the best options available is arbitration through the Financial Industry Regulatory Authority (FINRA). FINRA is responsible for overseeing the conduct of registered financial advisors, stockbrokers, and brokerage firms.

If you choose to initiate a FINRA arbitration complaint, FINRA arbitrators will hear your case. Your financial advisor must explain their reasoning behind this lack of diversification. If the arbitrators determine that negligence or misconduct caused you to suffer these substantial losses, they can order that your advisor compensate you.

Arbitration is often the preferred method for financial recovery because most cases can be resolved in as few as 18 months.

Meet with an Experienced Investment Loss Lawyer

To learn more about the FINRA arbitration process or the importance of portfolio diversification, reach out to a dedicated investment loss lawyer at Wolper Law Firm, P.A.. Schedule a free, confidential case review by filling out the quick contact form at the bottom of this page or calling 800.931.8452.

Attorney Matthew Wolper

Attorney Matthew WolperMatt Wolper is a trial lawyer who focuses exclusively on securities litigation and arbitration. Mr. Wolper has handled hundreds of securities matters nationwide before the Financial Industry Regulatory Authority (FINRA), American Arbitration Association (“AAA”), JAMS, and in state and federal court. Mr. Wolper has handled and tried cases involving complex financial products and strategies ranging from traditional stocks and bonds to options, margin and other securities-based lending products, closed/open-end mutual funds, structured products, hedge funds, and penny stocks. [Attorney Bio]