Stockbrokers and investment advisors have a responsibility to encourage their clients to diversify their investments. By diversifying the number of investments and type of investments, you reduce the potential downside risk of your account.
Investors should be diversified among asset classes, meaning they should own stocks, bonds, fixed income products and cash. This type of diversification helps cushion an account from severe swings in both directions. Investors should also diversify the sectors in which they invest. This helps protect investors in case one particular industry suffers from some unforeseen setback.
If your stockbroker or investment advisor failed to diversify your investments, and you suffered losses, you might be entitled to compensation. The failure of a financial professional to properly diversify account can occur in a variety of ways, below are some examples:
1) If you stockbroker places a large portion of your account into one investment, i.e. one stock or one mutual fund.
2) If your stockbroker advises you to only purchase one type of investment, i.e. putting all of your money into individual stocks and not recommending bonds or fixed income products.
3) If your stockbroker advises you to purchase different types of investments but all within the same industry, i.e. investing in stocks and bonds of biotechnology companies.
Seek Legal Help Quickly
If you have been the victim of overconncentration in your investment account it is important to seek legal help immediately. Any hesitation in filing a complaint and seeking legal help may be viewed negatively by arbitration panels and courts.
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Contact Mark & Associates, P.C. today to have your overconncentration case evaluated for free by an experienced stockbroker fraud securities lawyer. Please complete the case evaluation form on the right side of this page or call 1-866-50-RIGHTS (1-866-507-4448) to have your case reviewed.