FYI: It is a fact that value has waaay underperformed the S&P 500.
It is a fact that trend has waaay underperformed the S&P 500.
It is a fact that quality has waaay underperformed the S&P 500.
It is a fact that emerging markets have waaay underperformed the S&P 500.
It is a fact that real assets have waaay underperformed the S&P 500.
It is a fact that hedge funds have waaay underperformed the S&P 500.
Everything has underperformed the S&P 500. Hence diversification has been a multi-year fail. Expressed in one graph, the S&P 500 versus an equal-weighting of all the major asset classes: U.S. and non-U.S. stocks, U.S. and non-U.S. bonds, real-estate, commodities, and cash.
After five years of this advisors are tired of talking about it and investors are tired of listening. One could build a strong case for a diversification rally. But for now, diversification hasn’t worked.
Except for bonds.
Regards,
Ted
https://www.advisorperspectives.com/articles/2018/11/05/diversification-fails-for-stocks-but-wins-for-bonds
