BACK TO KEEP CALM AND REMAIN DIVERSIFIED

Diversification Requires Thinking Beyond the S&P 500® Index


A Diversified Portfolio* has historically smoothed out the ride over the long term without sacrificing returns.

 

The chart below demonstrates the unpredictable nature of individual asset class returns in a different way. In this chart, U.S. large cap equities are used as the “anchor” asset class. Compared to the anchor, you can see that the performance of some asset classes is erratic; a category that beat U.S. large caps one year can easily underperform in the next. But when a number of asset classes are combined into one diversified portfolio (the orange rectangles), some of that unpredictability may be removed.

Source: Barclays, Bloomberg, Dow Jones, FactSet, MSCI Russell, Standard & Poor’s as of December 31, 2019. The diversified portfolio is rebalanced to the original allocation annually. The indices are unmanaged, are not available for investment, and do not incur expenses. Click here for index definitions. The performance shown is not indicative of the performance of any mutual fund or other investment product. Past performance is no guarantee of future results.

Source: Barclays, Bloomberg, Dow Jones, FactSet, MSCI Russell, Standard & Poor’s as of December 31, 2019. The diversified portfolio is rebalanced to the original allocation annually. The indices are unmanaged, are not available for investment, and do not incur expenses. Click here for index definitions. The performance shown is not indicative of the performance of any mutual fund or other investment product. Past performance is no guarantee of future results.


*Diversified Portfolio

The indices are unmanaged, are not available for investment, and do not incur expenses. Click here for representative indices and definitions


Investments in debt securities are subject to credit and interest rate risk. An increase in interest rates typically causes the value of bonds and other fixed income securities to fall.
Investments in international securities are subject to certain risks of overseas investing including currency fluctuations and changes in political and economic conditions, which could result in significant market fluctuations. These risks are magnified in emerging markets.
Investments in small-capitalization companies are subject to greater price volatility, lower trading volume and less liquidity than investing in larger, more established companies.
Real estate investments are subject to factors such as changing general and local economic, financial, competitive and environmental conditions.
Alternative investments are speculative, subject to high return volatility and involve a high degree of risk including, but not limited to, the risks associated with leverage, derivative instruments such as options and futures, distressed securities, may be illiquid on a long term basis and short sales. There can be no assurance that these types of strategies will achieve their objectives or avoid substantial losses. Alternative investments may also be subject to significant fees and expenses.
Investments in emerging markets are subject to risks such as erratic earnings patterns, economic and political instability, changing exchange controls, limitations on repatriation of foreign capital and changes in local governmental attitudes toward private investment, possibly leading to nationalization or confiscation of investor assets.

AMG Distributors, Inc., a member of FINRA/SIPC.

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