Is Now the Time to Diversify Your Equity Portfolio?

  • Managed Futures 101
  • Market Commentary

As the bull market in equities continues to push to new highs, investor emotions tend to take over and it becomes very easy to get complacent with equity investments. In extended bull market runs, as we've seen over the last six years,  the average investor has a tendency to  become increasingly overweight in stocks. We feel a proactive approach is always prudent and recommend bi-annual portfolio evaluations; this means everything collectively - individual investments along with 401k's and IRA's.  Many investors are often surprised when we assist them in their evaluation and they suddenly realize how much of their net worth is wrapped up in and dependent upon stocks continuing to rise. 

Over a long period of time, 401k contributions are automatically allocated and profits from individual stock investments are easily reinvested into  larger and larger equity positions. It's often difficult to recognize, while things are going well, but quickly noticed when things turn.  However once things turn, it is complacency that becomes detrimental. We have all likely held on too long only to see the markets turn.  Once the market cycle shifts after such a long run, we tell ourselves that we'll start to exit some positions on the next rebound and when that rebound comes we then tell ourselves that everything looks fine again and there's really no reason to exit now. After all, you're diversified amongst a large basket of equities!

Here at aiSource, a large portion of our job is to help people better understand their entire portfolio and assist in determining the best course of action moving forward. Often this is as simple as suggesting that it may be a good time to have some cash on the sidelines or to move a small percentage of the overall portfolio to strategies that have no correlation to equities. There are many options available for today's investors that are specifically  designed to compliment their portfolio. These options can help minimize volatility while adding a layer of protection during  times when things may not be so fabulous. 

While you'll never be able to predict a market cycle change with accuracy and predict the top of a bull run, you can be proactive and take the time to evaluate your portfolio and find where you truly stand.  After evaluating, you may discover that it's not a bad time to protect some of those profits and hedge future risk by re-allocating a portion of your equity portfolio.

Disclaimer: Past performance is not indicative of future results. Futures trading involves substantial risk of loss and may not be suitable for everyone. By no means is this newsletter/blog post offering any investment advice or suggesting to make any trade recommendations. Please consult an aiSource advisor prior to opening any managed futures accounts.


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Past performance is not necessarily indicative of future results. Trading commodity futures, options, and foreign exchange ("forex") involves substantial risk of loss and is not suitable for all investors. In no way is the advisor of the month a direct recommendation of aiSource or any of its affiliates. Please carefully review the disclosure documents and any other promotional material prior to investing with any program. Managed accounts and/or managed futures are very risky and may not be suitable for all investors. Please consult with a Managed Futures specialists prior to investing.