The past three days alone………..
Slope of Hope Blog Posts
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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…)
I only listen to CNBC eight times a year (that is, during Fed announcements). It’s just embarrassing hearing everyone parse each little word, whether it’s a verb or a noun, etc. This is what we’ve all been reduced to. In any event, I’m keeping a close eye on the $RUT as markets continue to scorch higher……