The share market has lost ground due to a broad sell-off of banks, insurers and other financial stocks, and the Australian dollar's surge above 80 US cents was tempered by slightly weaker than expected economic growth. The benchmark S&P/ASX200 index dropped 0.29 per cent to 5,689.7 points, as the financial sector's fall outweighed gains by mining and oil producers. Commonwealth Bank was again the weakest of the banks, down 1.2 per cent, Westpac shed 1.1 per cent, National Australia Bank dropped 0.7 per cent ANZ was 0.5 per cent weaker. Origin Energy gained 0.8 per cent, Oil Search added 1.7 per cent and Santos was 2.4 per cent higher. BHP overcame an early fall to add 0.4 per cent to $27.73, Rio Tinto gained 0.2 per cent to $68.25 and Fortescue Metals was 0.5 per cent stronger at $5.96.

The Australian dollar hit 80.28 US cents overnight but fell back below 80 US cents after the release of the June quarter gross domestic product figures, which showed slightly weaker than expected economic growth of 0.8 per cent in the quarter, and 1.8 per cent annual growth.

What this means for you:
Diversification across asset classes is key to any portfolio construction. It is also important within an asset class. If you take equities as an example, typical sectors include resources (iron and gold, etc), financials (banks), communications (telecommunications), energy (oil and gas), technology and others.

By splitting your share portfolio across sectors, you can help balance the normal ups and downs these sectors may experience over a period of time, as seen in this week's market movements. Also remember that you may have to go offshore in order to gain access to other sectors not represented in the Australian market. It's important to know how your portfolio is constructed and the depth of diversification within each asset class. If you would like us to review your portfolio then give us call.