Hey, Investors: Do You Barbell?

Don’t overlook this simple yet effective strategy within your stock and bond allocations.

A man lifts a heavy barbell over his head.
(Image credit: Getty Images)

In the physical world, a barbell is a bar with two equal weights on either side that offset one another, creating a perfect balance. Apply this same concept to the investing world, and you have a very simple strategy (by the same name) used by some of the most sophisticated managers and investors. Some of the potential benefits of this strategy are hedging, risk reduction and smoothed returns.

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Disclaimer

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All investing involves risk, including loss of principal. No strategy assures success or protects against loss. ETFs trade like stocks, are subject to investment risk, fluctuate in market value, and may trade at prices above or below the ETF's net asset value (NAV). Upon redemption, the value of fund shares may be worth more or less than their original cost. ETFs carry additional risks such as not being diversified, possible trading halts, and index tracking errors. ETFs concentrating in specific industries are subject to higher risks and volatility than those that invest more broadly.

Disclaimer

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Asset allocation and diversification do not protect against market risk, nor ensure a profit or protect against a loss.

Disclaimer

Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss.

Disclaimer

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. Securities and advisory services offered through LPL Financial, a registered investment adviser. Member FINRA/SIPC.

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Brian Murphy
Market Strategist/Investment Manager, Frazier Investment Management

Brian Murphy is a Market Strategist and Investment Manager at Frazier Investment Management in Southern Rhode Island. Before joining the Frazier team, he served in the U.S. Navy for 11 years as a carrier jet pilot. Brian has experience managing several different strategies and products, including equity, fixed income, long/short portfolios and options. He believes that managing risk is the key to successful outcomes and works with clients nationwide to achieve their investing goals.