Diversified Wealth Management offers investors a simple way to achieve greater portfolio diversification while taking advantage of market inefficiency.

A Truly Diversified Portfolio

We believe a truly diversified portfolio consists of at least 15 completely different investments that have very little positive correlation to each other that strive to produce dividends, or income.

Adding Non-Correlated Investment Assets

Alternative investments* have the potential to help reduce your overall portfolio risk. These are most often risky investments and could potentially increase the risk in a portfolio if the investment goes sour. Alternative investments do not trade in the markets, so there is usually very little correlation between their performance and the performance of the stock or bond markets.

Layers of Diversification Within Our Portfolios

Mitigate the risk involved with investment planning. Target areas are defined by differences in their expected response to economic conditions, such as price inflation or changes in interest rates, which are then weighted throughout the portfolio by considering risk-adjusted returns and correlations. Diversification does not guarantee a profit nor does it protect against loss.

These target areas are subject to change based on client risk tolerance and intended goals. Many leading institutions, such as endowments funds, use this very same approach. Given the client risk tolerance and intended goal, the portfolio is carefully disbursed into each category with respect to the historical correlation between each target area.

*Investing in alternative investments is speculative, not suitable for all clients, and intended for experienced and sophisticated investors who are willing to bear the high economic risks of the investment, which can include:

  • Loss of all or a substantial portion of the investment due to leveraging, short-­‐selling or other speculative investment practices
  • Lack of liquidity in that there may be no secondary market for the fund and none expected to develop
  • Volatility of returns
  • Restrictions on transferring interests in a fund
  • Potential lack of diversification and resulting higher risk due to concentration of trading authority when a single advisor is utilized
  • Absence of information regarding valuations and pricing
  • Delays in tax reporting
  • Less regulation and higher fees than mutual funds

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A risk management technique that mixes a wide variety of investments within a portfolio.

A portfolio of different kinds of investments can, on average, yield higher returns and pose a lower risk than any individual investment found within the portfolio.

In order to have true diversification, you need to make certain that the different investments providing diversification, actually respond differently to each other.

Diversification strives to smooth out unsystematic risk events in a portfolio so that the positive performance of some investments will neutralize the negative performance of others.

Therefore, the benefits of diversification will hold only if the securities in the portfolio are not perfectly correlated.


A statistical measure of how two securities move in relation to each other.

Correlation calculates the probability of investments moving in the same direction, up or down, under the same stimulus.