Diversification of Investments in a Portfolio

Type: 
Best Practice
Approved by GFOA's Executive Board: 
January 2010
Recommendation: 

The Government Finance Officers Association (GFOA) recommends that, provincial and local governments properly manage the risk in their portfolios to achieve their investment objectives and comply with their investment constraints. GFOA further recommends the use of diversification in a portfolio as an important strategy for managing risk. Diversification strategies can be implemented through the following steps: