Our San Francisco Overconcentration Law Firm Helps Investors Pursue Claims Against Broker-Dealers
If you are a California investor whose portfolio has too many of one investment or the same kinds of investments, you may have an overconcentrated account that could make you vulnerable to suffering serious losses. At Shepherd Smith Edwards and Kantas (investorlawyers.com), our San Francisco, CA excessive concentration law firm is here to help.
What Is Overconcentration and Why Is It Usually An Inappropriate Investing Strategy?
Excessive concentration is when a California investor has too many holdings in one investment, market segment, or asset class in proportion to what else is in their portfolio. This can be precarious because if something happens to that one investment/asset class/market segment—such as a serious downturn or failure—the investor’s account could end up losing a lot of money. This is why a diversified portfolio is generally advised to hedge against investment losses that could arise.
Overconcentration is considered a risky investing strategy. And while sometimes it is a deliberate strategy—known as intentional concentration—it is typically only appropriate for sophisticated investors who understand the risks and are willing to withstand possible losses for a chance at the higher returns that may result.
Other kinds of overconcentration:
Concentration involving correlated assets: The investments belong to the same industry or sector. Because of this, if one of the investments loses its value, the others may also see a similar decline.
Illiquid investment concentration: Too many illiquid investments mean an investor would have a hard time selling these off if needed. Many alternative investments, including non-traded real estate investment trusts (non-traded REITs), private placements, oil and gas investments, business development companies (BDCs), and Delaware Statutory Trusts (DSTs) are considered illiquid investments.
Concentration involving company stock: When an employee has most, if not all, of their retirement funds invested in their employer’s stock.
Asset performance-caused concentration: This can happen if a certain asset performs well enough that it begins to take up most of an investor’s portfolio.
How Can Our SF Bay Area Failure To Diversify Attorneys Help?
From our securities law firm located at 1 Embarcadero Center, Shepherd Smith Edwards and Kantas represents investors all over the San Francisco Bay Area and the Silicon Valley, as well as throughout Northern California, in pursuing financial recovery from the broker-dealers that overconcentrated their portfolios. Unfortunately, the failure to diversify by a broker happens more often than you would like to think, whether because of ignorance or greed for the high commissions that can be earned depending on the investments involved.
It is very important that you DO NOT try to resolve your investor dispute directly with your broker-dealer, as this could hurt your chances of filing a successful legal claim later on. Most brokerage firms would rather deny or sabotage your case than pay you money. We are familiar with the many tactics that they can apply to keep you from holding them liable.
Our San Francisco excessive concentration law firm has been in the business of protecting California investors’ right to financial recovery and representing them in arbitration, mediation, and litigation for decades. When you work with us, know that your best interests are being looked out for by compassionate and knowledgeable securities attorneys who genuinely care about you and your family.
Contact Our San Francisco Overconcentration Law Firm Today:
If we decide to work together, your claim will likely be made in FINRA arbitration, which is where such legal disputes between financial advisors and their customers are usually made. This is not the same as going to court. You want to work with San Francisco overconcentration lawyers like us who have had success in this specific venue.
Because we work on a contingency basis, you would only pay for our securities law services if we secured a financial recovery for you. Call (415) 287-0877 or (800) 259-9010 or fill out this online form.
Our San Francisco Overconcentration Law Firm:
1 Embarcadero Ctr #500
San Francisco, CA 94111