The Poor Investor – Investigatory Value Investing

"Faber est suae quisque fortunae" -Appius Claudius Caecus

Tag Archives: other asset classes

Is Diversifying Your Portfolio Harder Now?

I was reading an article from Fidelity called “Where to Look for Returns” and came across an interesting table I wanted to share with all of you:

For those of you looking to diversify your portfolios this appears to be a lot more difficult nowadays.  It also appears that these high correlations are not going to change anytime in the near future.  Furthermore, it is my belief that return enhancement via the effects of rebalancing (great article about rebalancing) may be reduced due to these high correlations.

Note: Personally, I use TIPS for portfolio diversification since historically (and currently) they still have the lowest correlation to equities.

—-Written by: The Poor Investor

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