The Latest Thoughts on Portfolio Diversification

Can investors still successfully hedge in today's markets?

When it comes to diversifying your investment allocations, there are two common approaches: spreading the money across different asset classes, or diversifying within those classes globally. There is a third approach, however: combining both of these diversification strategies. The below pieces of content ought to help you do just that.

Emotions and Subjective Crash Beliefs (Shiller et al.)

Emotion and mood have been shown to play a role in financial beliefs, preferences, and decisions. This paper examines how emotions affect portfolios.

The Paradox of Diversification: The 60-40 Portfolio’s Future (PGIM)

This podcast focuses on the evolving role of the traditional 60/40 portfolio in today's fast-changing market environment.

From Buy to Bye: Sell Discipline and Overcoming Behavioral Biases (Mawer IM)

What are the common behavioral biases that can hinder clear sell decisions? Allocators can learn more about this topic by listening to this engaging podcast.

Building a Hedge Fund Allocation: Top-Down and Bottom-Up (GIC)

As institutional investors focus on ways to diversify a traditional 60/40 portfolio, hedge fund allocation has emerged as a timely topic.

Bear Markets Have Lasted Longer than Most Permabulls Think (Price Action Lab)

Many analysts have come to believe that forecasting a market crash is the key to gaining attention from mainstream financial media.

A Century of Diversification – Was It Worth It? (Barclays Private Bank)

One of the key findings of this paper is that diversification significantly reduces portfolio risk by drawing on the strengths of both the fixed income and equity worlds.

Optimal Impact Portfolios with General Dependence and Marginals (MIT Sloan)

The authors of this paper offer a framework that provides a toolkit for practitioners to construct impact portfolios and quantify their performance using real data.

PE May Not Be the Diversifier We Think, but PC Could Be (Alpha Architect)

Volatility laundering is a tool used by promoters of private equity in an attempt to increase investor allocations to the asset class.