Stockbroker FraudEnergy Overconcentration Losses Financial Advisor Claims

If you suffered investment losses due to energy overconcentration by your financial advisor, please contact one of our securities attorneys to discuss your rights. Complete the form on this page or call 1-800-934-2921.
May 25, 2020

In the first quarter of 2020 crude oil prices have declined by approximately 66%. As a result, investors with exposure to investments in crude oil, natural gas, heating oil, and energy exploration have suffered losses largely in excess of the overall stock market’s decline. For those investing in leveraged energy exchange traded funds (ETFs), the losses were even greater. Investors should expect continuous volatility as oil prices remain under $25 per barrel.

If you suffered investment losses due to energy overconcentration by your financial advisor, please contact one of our securities attorneys to discuss your rights. Complete the form on this page or call 1-800-934-2921.

The S&P 500 is comprised of approximately 10% in energy companies. Investors with portfolio concentrations in energy that exceed that threshold have an overconcentrated portfolio. Portfolios with overconcentrated positions do not comply with industry standards and are subject potentially more volatility than a well-diversified portfolio that is spread out amongst various market sectors. Investors can also manage risk by having allocations to investment graded fixed income holdings.

According to FINRA’s website regarding retirement portfolios, it states the following regarding asset allocation http://www.finra.org/investors/managing-your-retirement-portfolio:

“One strategic approach to investing during retirement is to maintain a particular mix of investments in your portfolio that you believe will provide the return you seek, at a level of risk you are willing to take. The process of creating such a portfolio and spreading out your risk is known as asset allocation. Asset allocation is important because each investment category, such as stocks, bonds or cash, tends to perform differently in different economic conditions. By spreading your investment principal among a number of different types of securities, you are often able to smooth out the ups and downs of your overall portfolio” – See more at: http://www.finra.org/investors/managing-your-retirement-portfolio#sthash.Ir7ZgRxw.dpuf.

FINRA’s website also provides guidance on diversification:

“How Can I Manage Risk? While you cannot completely avoid market risk, you can take a number of steps to manage and minimize it. Diversify: Like business risk, market risk can be mitigated to a certain extent by diversification—not just at the product or sector level, but also in terms of region (domestic and foreign) and length of holdings (short- and long-term). You can spread your international risk by diversifying your investment over several different countries or regions.” –

See more at: http://www.finra.org/investors/market-risk#sthash.XsySvlQa.dpuf

Energy Overconcentration Losses?

If you suffered investment losses due to energy overconcentration by your financial advisor, please contact one of our securities attorneys to discuss your rights. Complete the form on this page or call 1-800-934-2921.