Top 401k Banner from last issue 9 We all know that diversification can be good for your portfolio because it means you’re less reliant on one type of investment to do well. Beyond just having a mix of equities (stocks) and bonds, you should also consider having a mix of different investment classes within each. That way, you’re exposed to multiple types of invest - ments and ultimately creating a more well-rounded portfolio. A CLOSER LOOK AT EQUITY DIVERSIFICATION When it comes to equity investments, there are a few key distinctions you’ll want to keep in mind: size, country, and style. Size One way to increase the diversifica - tion of your investments in compa - nies is to make sure you’re investing in companies of different sizes. Com - panies are usually broken down into three categories by size, and their size is determined by their market capital - ization, or market cap for short. (That’s the technical term for the value of the company.) • A small cap stock generally has a market capitalization of under $2 billion. • A medium cap stock generally has a market capitalization be - tween $2 billion and $10 billion. • A large cap stock generally has a market capitalization over $10 billion. Investing in all three can help diversify your portfolio because they can each experience different risk and return patterns. Country There are two major types of equity investments you can make when it comes to the region you’re investing in: domestic and international. If you’re building a portfolio of ETFs, which give you access and exposure to hundreds of investments with a sin - gle fund, you’ll also see a third category based on country: global. A global ETF is one that contains stocks from both domestic and international companies. When you’re diversifying between in - ternational and domestic investments, it’s important to understand that they do differ when it comes to their risk lev - els: International investments expose you to currency fluctuations, and some international investments are more vol - atile than others. Style There are two different investing styles you can diversify between when it comes to an ETF based portfolio: growth and value. Growth investing aims to invest in com - panies that are poised to outgrow the general market, whereas value invest - ing aims to invest in companies whose stocks are relatively cheap based on an analysis of the company and the mar - ket it operates in. You can find ETFs that are built to track indexes that are built on each in - vestment style, which is a great way to expose your investments to each style without having to do all of the analysis yourself. WANT TO LEARN MORE ABOUT BOND DIVERSIFICATION? Understanding Asset Classes for Better Portfolio Diversification Effective February 15, 2023, the IAM National 401(k) Plan will be adding the IAM American Century Small Cap Growth Fund and the IAM Vanguard Target Retirement 2070 Trust II to its investment lineup. Additional infor - mation from the Plan’s recordkeeper, John Hancock, on these investment options will arrive in mailboxes in mid-January. IAM National 401(k) Plan Investment Lineup Changes CLICK HERE