Investing in a small number of securities increases your porfolio risk. To StateTrust reducing risk involves investing in a variety of non correlated assets and securities.
Diversification* is a key component of well managed structured portfolios. It does not eliminate the risk of experiencing investment losses or Market risk (the risk that the entire market will experience a decline in price). Even if a portfolio holds every stock in the market it will still be exposed to market risk.
The following image illustrates a hypothetical portfolio and shows that holding more than 100 stocks assumes very little company risk. As the number of stock holdings surpasses 100 stocks, the risk converges to that of the Market.
* Diversification does not guarantee a profit or ensure against loss.
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