Is Your Portfolio Over Concentrated in Oil and Gas Partnerships?
Maintaining a diverse portfolio is one of the most basic principles of prudent investing. Unfortunately, when the oil and gas sectors were booming in recent years, many unscrupulous brokers and advisers encouraged an over concentration of investments in this one area. Eventually those sectors went into decline, and investors experienced out-sized losses exactly because of this over concentration. This is an example of improper behavior on the part of the brokers and advisers because as fiduciaries, brokers and advisers are required to put their client’s financial best interests first and foremost. This means avoiding unnecessary risks and advocating for a diversified portfolio. Over concentration, whether in energy and gas or in any other sector, is a fundamentally risky investment strategy and may also be a breach of the responsibilities legally required of a fiduciary.
Did You Suffer Losses Due to Over Concentration in Oil and Gas Partnerships in Your Portfolio? Recover Your Losses!
Some brokers and advisers will try to justify their reliance on over concentration by pointing to the stratospheric gains in the oil and gas sectors. But even if there was money to be made, a strategy based around over concentration is inherently unbalanced. No investor’s interests are served by putting all their eggs in one basket. That means not only investing in multiple companies, but also in multiple sectors.