Diversify investments to avoid sleepless nights
It’s not a matter of IF . . . but WHEN . . . the next disaster will rock the financial world. Even though there may not be another pandemic for
100 years or so, smaller ripples anywhere around the globe will still
send some investments on roller coaster rides.
The Covid-19 crisis made a lot of people swear to stay away from the stock market; but as some shares plunged to record lows, there were still a few winners. Folks who had made investments in pharmaceuticals like Abbott Labs watched their fortunes rise as stock prices for many businesses fell. Abbott earned respect for its timely response in producing quick testing for the virus. Other crucial companies garnered good vibes with investors by being proactive in the worldwide crisis, too.
Diversify, diversify, diversify Investors who knew the value of diversifying their portfolios before the coronavirus hit didn’t lose much sleep. Investments in organizations like Amazon, Zoom, Netflex, Clorox, Kimberly-Clark, Costco, Kroger, Wendy’s, Gilead Sciences and Allied Healthcare all fared well as need for their products and services escalated. Sectors like home entertainment and delivery services soared.
Diversification is key to making it through such disruptions. Investors with varied holdings survive most turmoil. The S&P Dow Jones identifies 11 different sectors, each adding diversity to ride out the storms. These 11 sectors, divided further into industry groups, industries and sub-industries, include:
Communication Services: Telecommunication, media and entertainment, cable, landline and mobile phones. Consumer Discretionary: Industries like auto, hotel, restaurant, travel and other budget extras or luxuries.
Consumer Staples: Basic needs: food, household goods and personal products, plus retailers that sell them.
Energy: Oil, gas, coal, solar and wind energy producers, along with related equipment and services.
Financials: Banks, insurance companies, investment firms, investment funds, mortgage brokers.
Healthcare: Life science companies, research labs, pharmaceuticals, health care providers, biotechnology. Industrials: Manufacturing, construction, defense, aerospace, transportation and related industries.
Information Technology: Software developers, electronics manufacturers, IT and almost anything online.
Materials: Mining, chemicals, metals, geology and forestry, refining companies and their supply chains.
Real Estate: Industrial, residential real estate holdings, rentals, leases, management of land and property.
Utilities: Utility service companies like water, electricity and gas, that produce steady repeating income.
To learn more about these 11 sectors, go to aamllc.com to make an appointment or call Ron VanSurksum, certified financial planner, at (616) 450-8439. You can also email him at email@example.com
Manage Your Money . . . financial facts for a brighter future provided by Advancd Asset Management LLC
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Ronald Van Surksum, CFP
4555 Wilson Ave SW – Suite 2 Grandville, MI 49418 firstname.lastname@example.org Phone: (616) 531-5220 Cell: (616) 450-8439
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