Investors who have become overweight in growth stocks following a stretch of outstanding relative returns are faced with a conundrum. Many wish to maintain exposure to the extraordinary long-term growth potential of new innovations, such as artificial intelligence, cloud computing, advanced medicine, and others. However, they also worry about the added risk that accompanies high growth stocks and their contribution to the overall riskiness of their portfolios. These concerns are heightened by the significant increase in valuations for many growth stocks over the past several months. Below, we discuss a barbell approach to managing portfolio risk that seeks to balance some of the higher risk exposure of growth stocks by incorporating an allocation to the First Trust Value Line® Dividend Index Fund (FVD).

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