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Asset Allocation

Asset allocation is a critical part of creating a profitable investment portfolio, and a good investment manager is familiar with a wide variety of assets that can be used to build an investor’s financial gains and ensure stability and diversity. There are many types of assets that can be incorporated into a financial portfolio, including real estate, natural resources, stocks, bonds, and cash.

These assets can fluctuate in value from time to time, and some may be higher in value than others at any given point. This is why it is important to incorporate a wide variety and keep from relying too much on the profits of any one asset.

When your financial advisor puts together a plan for your profile, he or she has to make that plan viable for the long-term, which puts certain restraints on the level of risk that can be taken and the asset options that are available. But within this plan, your advisor needs to work consistently to further your financial goals, whatever they may be.

Every advisor may suggest different asset allocation plans for your consideration, and there is not one specific, right way to divide up investments, but California securities fraud lawyers say that far too many investment managers make these determinations the wrong way—and that way can leave you a financially ruined victim of fraud.

Duty to Allocate Responsibly

It is your advisor’s responsibility to provide you with a knowledgeable asset allocation plan to ensure your security. Unfortunately, financial advisors and stockbrokers can misallocate assets for a variety of reasons—laziness, lack of experience or understanding about the financial markets or for their own benefit. While nothing fishy should ever be going on with your finances, it is the personal gain misallocation that most often results in investigations and legal action, securities fraud lawyers in California report.

Investment portfolios take into account a range of ever-changing factors, including the age of the investor and the financial needs he or she has at the time. A good financial advisor will be in frequent communication with his clients to gain new information and fully understand how to direct specific portfolios. Any risks taken should be in balance with the expected rewards to be gained and each investment has a different amount of risk and reward associated with it.

Protect Your Finances

Asset allocation is intended to maximize your return and minimize your risks. Proper allocation can account for over 90 percent of an investor’s return, so if your financial advisor or portfolio manager has failed to adequately invest your funds in a variety of high-performing assets, you could stand to lose a great deal of money and your financial security could be threatened.

When this happens, you need the help of a securities fraud lawyer. At the Evans Law Firm, Inc. we represent investors who have been swindled out of thousands by their portfolio managers, either through the advisor’s negligence or fraudulent attempts to steal funds. To discuss your case, and begin filing a claim, contact one of our securities fraud lawyers today. We can be reached by email at, or by telephone at (888) 503-8267 or (415) 441-8669.

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