Diversification and Asset Allocation Diversification means spreading one's money among different investments; asset allocation diversifies a portfolio among different investment classes. Both concepts work to lessen the risks of investing, but each should be incorporated into one's overall investment plan. We focus on diversification while building one's financial plan; asset allocation is addressed in the investment management of the plan. Together diversification and asset allocation work to minimize the amount of risk exposure while maximizing a portfolio's overall return. To assure proper asset allocation and diversification of "collective investments” such as mutual funds, exchange traded funds and 401k plans, your portfolio must be managed at multiple levels. One level of management is performed with the investment's fund manager; our clients appreciated an additional level of management through our firm. The additional management level assures that your assets will be diversified while at the same time allocated properly between different asset classes.