Financial Literacy Month: Fact or Myth? Spreading your investments across different accounts or advisors means you're automatically diversifiedd.

Fact or Myth? Spreading your investments across different accounts or advisors means you’re automatically diversified.

Myth!

Simply using different platforms or advisors doesn’t guarantee diversification. Each account or advisor is likely managing a separate portfolio and may be unaware of the others. This can result in overexposure to certain investments, like holding too many stocks in the same sector or asset class. Even if each portfolio looks balanced on its own, you could end up with two or more portfolios that seem well diversified, but when you combine them, you might find you’re overexposed in one category or another. True diversification requires careful planning across all your accounts, ensuring that each portfolio is aligned with your overall financial goals and risk tolerance. Regular check-ups and rebalancing are essential to maintaining a truly diversified portfolio.

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