The just concluded first quarter of 2014 was a lot like a roller coaster. There were highs, lows and a scary drop, but in the end it was a pretty good ride.

At one point, the Dow Jones lost more than 7 percent before recovering most of that loss by the end of the quarter. Bonds provided a buffer against this volatility with municipal bonds rallying after a very poor 2013 performance. Publicly traded real estate investment trusts gained nearly 8 percent, preferred stocks shot up more than 5 percent, and troubled world markets like Italy and Spain seem to have turned the corner.

So after a 2013 that saw US stocks beat nearly every other asset class in the world, we’re seeing other investments take the lead so far this year. Bottom line – if you were chasing the hot asset class in the first quarter, you got tossed around a bit on this ride. But if your portfolio was diversified, it was like being snuggly strapped into your seat. Your overall holdings remained somewhat stable through the inclines, dips and plunges.

History tells us that diversification works over the long haul, as well. In the last ten years, an asset class has been the “best performing” asset class in consecutive years only once, according to Bloomberg. That asset was gold in 2010 and 2011. But over that same 10 year time period, there were four years in which the best performing asset class one year was the worst performing the next, or vice versa. That makes a strong case for not putting all your eggs in one basket. It’s also an argument to perhaps hold onto an asset that suffers a down year. Keep these lessons in mind as conduct your quarterly assessment of your holdings.

Did you rebalance at the beginning of the first quarter?