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Tag Archives | diversification

When Doing Nothing is Investment Strategy

A few weeks ago, when the US markets started dropping dramatically, a reporter for The Wall Street Journal called. He asked me if I had received any calls from worried clients. I told him I had heard from 5% of my clients. “What changes in their portfolios are you making?” he asked. “I’m not making […]

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Diversify with Global Investing

Around twelve years ago the South Dakota Investment Council combined two of their asset classes, domestic and international stocks, into one, global stocks. While this move didn’t make the nightly news, it did signify a growing trend. Many investment managers no longer view the US stock market as a separate asset class from the rest […]

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Diversification As An Investment Anti-Depressant

“We are in both a depressing and boring investment environment.” That not-so-cheery statement came from Cliff Asness, Ph.D., managing and founding principal of AQR Capital Management, LLC. Personally, I can handle “boring” investment environments just fine. Actually, when it comes to my investments I much prefer boring to exciting. I had all the investing excitement […]

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Risk of Comparing Portfolio Apples to US Stock Oranges

It may be entertaining to watch Donald Trump point his finger and curtly say, “You’re fired!” When a client says the same thing to me, it isn’t so funny. I’m especially not amused if a client fires me because their diversified portfolio is underperforming the US stock market and they abandon the strategy. The result […]

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When Diversification Fails

Whenever one kind of asset is going down, ideally you want something else in the portfolio to be going up, responding to different influences. Correlation coefficients are one of the most complicated areas of the asset management world, but the idea behind them is pretty simple–or, at least, most of us thought it was until […]

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