Adequate portfolio diversification is the foundation of any prudently constructed portfolio. CTC believes that a well diversified portfolio does not have excessive stock-specific risk, sector risk or asset class risk. Each portfolio should have natural hedges against extreme macroeconomic events such as high inflation, recession or geopolitical risks. CTC also believes that excessive diversification limits the ability for active managers to add value over their benchmark. It is important to note that diversification does not eliminate risk, but proper diversification can help reduce risk. CTC utilizes diversification to preserve clients’ wealth by maintaining meaningful exposure to four primary categories of investments: 

• Cash equivalents and fixed income securities
• Common stocks and private equity
• Hedge funds and other alternatives
• Hard assets such as real estate and natural resources