If you need proof of the value of diversification, look no further than the performance of emerging-market stocks over the past two years. In 2017, they outperformed all other major asset classes, generating an impressive 37% return. In 2018, they came in dead last, ending the year down 15%.1
At Schwab, we believe diversification is the best antidote to volatile markets. Think of it as a financial shock absorber: By spreading your investments across a range of asset classes, you can dampen the impact of any one investment.
That said, volatility is in the eye of the beholder. Some want as few bumps in the road as possible, while others can tolerate a rocky ride in pursuit of higher returns. If you’re unsure how much risk you’re truly comfortable with, Schwab Intelligent Portfolios® can help. The Investor Profile Questionnaire identifies both your goals and relative comfort with risk, then suggests a diversified portfolio that’s most appropriate for your needs. Get your portfolio recommendation now.
Of course, diversification won’t eliminate market risk altogether, but it can help you stomach the rough patches. If you’re ever feeling unsure about the road ahead, feel free to give us a call or stop by your local branch. We’re here to help.
Charles R. Schwab
Founder & Chairman
1Schwab Center for Financial Research. Emerging-market stocks are represented by the MSCI Emerging Markets Index.