Diversifying Your Investments Like the Pros

Provided by Russell Investment Group

The small investor just doesn't have the same opportunity for marketplace success as the large investor—or so it would seem. Billion-dollar retirement funds can afford the kind of sophisticated investment advice necessary to possibly see their assets grow while managing risk. However, by investing selectively in mutual funds, the small investor can often participate in the strategies available to large retirement plan sponsors, and thus receive many of the same advantages, but on a smaller scale.

In reality, billion-dollar pools of capital face the same challenge as small investors—how to increase return and reduce risk at the same time. Many major pension funds work toward this objective by following a diversification strategy commonly described as multi-asset, multi-style, multi-manager.

Diversification as an investment strategy is not a new concept; what historically has set apart major pools of capital from other investors is their ability to practice a multi-dimensional philosophy of diversification, which effectively provides an investor with the ability to diversify within diversification.

Russell Investment Group is one of the early pioneers of this multi-asset, multi-style, multi-manager investment approach.

You may be telling yourself, "So large pension funds can afford all this diversification; they can afford to hire multiple managers, and so forth. But small investors, like me, just don't have the resources to spread around like the big guys." But the small investor, or participant in a company-sponsored 401(k) retirement plan, can benefit from similar investment strategies by selectively investing in mutual funds.

It is important to investigate the investment philosophy of the funds you are considering. There are programs available that give you multi-asset, multi-style, multi-manager diversification, which may reduce risk and increase investment return.

Billion-dollar pension funds can do it—and so can you—with some careful investigation of the funds and services available to you. While it is still true that "you have to have money to make money," a little money, well-invested, can go a long way toward making a lot more.

You should carefully consider the investment objectives, risks, expenses and charges of the investment company before you invest. Your Northwestern Mutual Investment Services Registered Representative can provide you with a prospectus that will contain the information noted above, and other important information that you should read carefully before you invest or send money.