Slope of Hope Blog Posts

Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.

Can a Portfolio Truly Be Well-Diversified?

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Although we often hear (or read) the words “diversified” and “portfolio” together, we should question if it is really true that an investment portfolio can really be well diversified.

To speak about diversification, we first need to speak about “correlation”. When it comes to correlation, our creed can be summed up in a statement once made by Ray Dalio of Bridgewater Associates:

“People think that a thing called correlation exists. That’s wrong. What is really happening is that each market is behaving logically based on its own determinants, and as the nature of those determinants changes, what we call correlation changes”. (Jack D. Schwager, “Hedge Fund Market Wizards, How Winning Traders Win”, Wiley 2012) (more…)