- March 1, 2016: Vol. 3, Number 3

To read this full article you need to be subscribed to Real Assets Adviser

All-Weather Diversification: Investors cannot eliminate swings in portfolio value, but low correlations can help mitigate them

by Brad Case

This winter’s weather seemed to hit me everywhere I went. The second-heaviest snowfall ever recorded shut down my hometown in Virginia. A colleague canceled a meeting with me after snow trapped him in his home in Colorado. My sister couldn’t make it up her Massachusetts driveway to get to the airport. Even when I escaped to Florida, driving rain kept me indoors.

There’s no reason your clients wouldn’t feel similarly trapped by investment market developments. Last year was dismal for practically every asset category: large-cap U.S. stocks (S&P 500) were among the bright spots with total returns averaging just 1.38 percent, while U.S. bonds (BC US Agg) were even weaker at just 0.55 percent. Small-cap U.S. stocks (Russell 2000) hurt investors with returns averaging –4.41 percent, while usually reliable large-cap value stocks disappointed at –3.13 percent; small-cap value stocks were even worse at –7.47 percent. Non-U.S. investments were frightful, with stocks (

Glossary, videos, podcasts, research in the Resource Center

Forgot your username or password?

Close your account?

Your account will be closed and all data will be permanently deleted and cannot be recovered. Are you sure?

We respect your privacy! Please give consent for processing data as described in our Privacy Policy