Helping Investors Protect Their Rights

Helping Investors Who Have Been Harmed By An Over-Concentration Of Funds

Given the risks inherent in any one investment or sector, diversification of an investment portfolio is an important means for reducing risk. When financial advisors place investments in one kind of stock or in one kind of industry, a sudden downturn in the industry in question can result in substantial losses.

Investors can suffer financial devastation from the over-concentration of funds in particular investments. At any given time, a specific company or industry can be having problems, such as real estate or oil in the last several years. By having a diversified portfolio, only a small part of your portfolio should be going down when a specific company or industry is in turmoil.

By investing in different kinds of stocks and different kinds of industries, the risk involved is spread out over a number of different areas. Consequently, if one of your stocks loses value, the risk to your overall financial health will be reduced. Jeffrey A. Feldman in San Francisco seeks damages for clients who have suffered substantial financial loss due to an over-concentration of funds by their investment advisor. As your attorney, Mr. Feldman consults financial experts in evaluating the actions and decisions made by your stockbrokers and investment advisors.

Don’t let your stockbroker or advisor blame “market forces” for their bad decisionscomplete an online contact form today. Mr. Feldman provides free consultations in order to evaluate your securities case and discuss how he can help you recover damages.

Over-Concentration Of Funds: How Do I Know If I Have A Case?

Stockbrokers and financial advisors realize the dangers associated with an over-concentration of funds in a single investment or sector. Even in cases where investing in a high-risk, high-yield stock makes sense, you typically will not want to invest more than a small percentage of your investment capital into that high-risk investment. This is also true for relatively safe investments; diversification is often the key to success in the stock market.

If your broker or advisor recommended transferring assets to invest in a small group of stocks or sectors they may have breached their fiduciary duty. While your broker or advisor may claim they explained the risks to you initially, they must still explain why they exposed you to an over-concentration in an investment. Additionally, they may not have disclosed all pertinent information to you about a particular fund, stock, or sector. Even a fully disclosed recommendation can be unsuitable.

Failure To Diversify

Investment diversification is the first rule of investment. When your broker fails to diversify your investments, he may be guilty of misconduct. Just as concentrating a large amount of your portfolio in one type of investment is dangerous, failing to diversify your portfolio can also result in large and unnecessary investment losses.

Questions? Contact Lawyer Jeffrey A. Feldman.

Jeffrey Feldman has successfully represented hundreds of clients in securities arbitrations. He has recovered many millions of dollars for clients who suffered losses due to financial mismanagement by stockbrokers and investment firms. If you have suffered financial loss due to an over-concentration of funds or a failure to diversify investments on the part of your broker or financial advisor, complete an online contact form today. Mr. Feldman can evaluate your case, review the actions and behavior of your financial manager and determine if you have a case.

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