Stock Fraud - Over Concentration
Full Video Transcript
One of the undisputed truths of modern investing is that a diversified portfolio is a safer choice than an investment portfolio comprising a single or limited number of assets. For example, a person heavily invested in only Enron stock would have lost their entire life savings had they only invested in the one company, whereas a diversified investor may still have money today. When we hire investment professionals to manage our portfolios, we expect they will help us diversify our assets in order to better manage the risks of the market. However, this isn’t always the case. Some advisors and brokers, either through laziness, incompetence, or unscrupulous behavior may not invest your money wisely. This is known as overconcentration, and it may be illegal. If you hired an investment professional who lost some or all of your money because of overconcentration, you may be able to sue that person for stock fraud. Talk to an experienced attorney to find out your legal options.