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