• DID YOU LOSE MONEY IN THE STOCK MARKET?
• DID YOU HAVE TOO MUCH INVESTED IN ONE STOCK OR ONE SECTOR OF THE STOCK MARKET?
• DID YOUR BROKER OR ADVISOR FAIL TO WARN YOU OR ADVISE YOU ABOUT OVERCONCENTRATION?
• DID YOUR BROKER OR ADVISOR RECOMMEND DIVERSIFICATION OR HEDGING?

ABOUT US

The law firm of Stein, Stein & Pinsky, P.A. has decades of experience representing individual investors and brokerage firms in a variety of securities and financial based claims.  With a team oriented, results-based approach, the firm seeks to represent each client with the utmost respect, dedication and zeal.  In addition to the firm's foundation in the field of securities law, each of our attorneys carries a unique set of experiences and legal skills, and are ready to represent clients in other matters.  Please read more about our attorneys and all of our areas of practice by following the links above.

In addition to prosecuting and defending arbitration cases across the country, including FINRA, NASD and NYSE arbitrations, our attorneys are licensed to practice before the state courts of Florida, New York, Texas and Nebraska, the U.S. District Courts of Florida (Southern, Middle and Northern Districts), U.S. District Court for the Eastern District of New York, U.S. Court of Appeals for the Second, Fifth, Ninth and Eleventh Circuits, U.S. Patent and Trademark Office, U.S. Tax Court and the Supreme Court of the United States.

STEIN, STEIN & PINSKY, P.A.
1499 West Palmetto Park Road
Suite 300
Boca Raton, Florida 33486
Toll Free: 1-888-222-4124
Local: (561) 368-0888
Facsimile: (561) 368-2010

OVERCONCENTRATION

Overconcentration generally exists when your investment portfolio contains too great a percentage of one stock or too great a percentage of a collection of stocks in one sector of the market.  Another way of expressing overconcentration is to say that a portfolio with overconcentration is not well diversified or well hedged portfolio.

DIVERSIFICATION & HEDGING

DIVERSIFICAITON

Diversification is a form of risk management.  The idea is to spread your money across a variety of investments rather than focus on one or two stocks or one sector of the market. Experts believe that a portfolio that includes a variety of investments should bear a lower risk than a portfolio that contains little variety, or is comprised of just a few investments that make up an inordinately large portion of the portfolio.

When diversification is properly applied, it should work to balance poorer performing investments with better performing investments. Often, if a portfolio contains a variety of stocks, but mostly from within the same sector (i.e., technology, finance, healthcare, etc.), the portfolio is not well diversified.  Should one sector of the market begin to perform poorly as a whole, your portfolio will similarly suffer.  If however, your portfolio was spread across a variety of sectors and stocks, you have a much better chance of experiencing growth in your portfolio, or at least survival through the rough times.

This is not intended to be a complete explanation of all the ways you can diversify your portfolio (which may include discussions about foreign investments, bonds, etc.).  We are not registered investment advisors and do not hold ourselves out to be such.  We do, however, have experience prosecuting and defending cases which involve brokers’ failures to properly advise their clients to diversify or hedge their portfolios.  As a result, we understand that in times such as these, it is important to review your portfolio for diversification and hedging, and if you have lost money as a result of your broker failing to properly advise you about these strategies, you should seek an attorney’s assistance to review potential claims.

HEDGING

Even if you choose to not diversify your portfolio, there are still measures you can take to protect your investments.  This is where hedging strategies come into play.

While some hedging strategies can be complex, and require the assistance of a licensed financial advisor, the can be explained in some general terms.  Simply put, there are certain types of investments you can make, such as “puts,” “calls,” or future contracts, which will act to “hedge your bet.”  Generally with a hedging strategy, you limit some of your upside by limiting your downside.  These strategies are often applied in an uncertain market, or when you hold highly concentrated positions in your portfolio.