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Should Diversification Come at a Cost?

Getting diversification for your investments should not come at a high cost. Learn how 4Thought Financial makes the process easier and less expensive.

Investors often believe that they cannot obtain proper diversification within their investments without paying a significant amount in investing fees such as upfront mutual fund sales charges and ongoing internal expenses.  However, the advent of technology-driven investing has allowed investors to create a properly diversified portfolio at a relatively inexpensive cost.  Best of all, this does not necessarily come at the expense of traditional human interaction and service.

The ”new normal” of traditional retail investing will not only encompass technology-driven investing, but also the embrace of a flexible investment methodology that can adapt both to a variety of market environments and to the lifecycle of the investor.  This approach must not only be adaptable and cutting-edge, but it should not come at a bleeding-edge cost.

Investors should be aware of the various options available to them.  Although it is easy to be confused and expose your portfolio to additional risk in pursuit of diversification, working with an investment manager who utilizes a thoroughly developed investment methodology will make the process easier.  For investors that are already busy with their daily lives, the tasks of asset allocation, investment research, and finding the best investing ideas in the market should be handled at least partly by professionals, instead of solely relying on television pundits and hearsay.

Investing that Delivers Value

Investors often become fixated on fees and expenses.  But while this is a significant consideration, investors should consider the value that their professional managers are delivering in light of the expenses being paid.  Although a solid investment strategy and good management is not necessarily cheap, it should not be atrociously expensive either.  Acquiring the desired strategies, exposures, and proper diversification with one’s investment portfolio should not be bank-breaking proposition.

High Impact Investments, Low Cost Management

Fees and expenses add up and affect long-term investment returns significantly. In order to mitigate the effects of fees and expenses, investors must be aware of how much they are paying in the first place.  Diversification should not be a detriment to your financial goals.  At 4Thought Financial, we believe that investors not only need a diversified portfolio, they need options that provide transparent access to impactful investments and a unique investment philosophy.  Best of all, all these benefits can come at a reasonable cost.

Besides potentially achieving better results on their investments, investors can also get a better understanding of their portfolio.  By being more transparent, we believe that our investors can actually get more value out of their investments than they would otherwise.

Learn more about how we improve the diversification process for the investments of our clients.

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