Financial advisor Brian Visconti, recently of Tampa, Florida, was recently involved in a legal dispute with a customer who alleged that Visconti made unsuitable investment recommendations. According to FINRA’s Brokercheck website, the customer alleged that Visconti “improperly recommended investing in only a handful of technology sector equities.” The case settled for $65,000. Mr. Visconti was most recently associated with the brokerage firm Raymond James. Prior to that he had spells at Wells Fargo Advisors and JP Morgan Securities.
The benefits of diversifying are well established and have been explained by FINRA as follows:
Asset Allocation. By including different asset classes in your portfolio (for example stocks, bonds, real estate and cash), you increase the probability that some of your investments will provide satisfactory returns even if others are flat or losing value. Put another way, you’re reducing the risk of major losses that can result from over-emphasizing a single asset class, however resilient you might expect that class to be.
Diversification. When you diversify, you divide the money you’ve allocated to a particular asset class, such as stocks, among various categories of investments that belong to that asset class. Diversification, with its emphasis on variety, allows you to spread your assets around. In short, you don’t put all your investment eggs in one basket.