investing is are like puzzle pieces, it's not always simple

The stock-bond correlation: it’s not always simple

Market Ethos.
19 September 2022.

The path to maximum wealth creation is to bet the farm on one security — you just have to pick the right one. Just ask Jeff Bezos or Bill Gates. Unfortunately, making the right choice is either impossible or simply luck with incredibly impossible odds. Ask Christian Gronet (Solyndra) or Julie Wainwright (Pets.com): lesser-known innovative founders that just didn’t make it. So, investors opt for the safer and more reliable plan B to reach their long-term goals; instead of shooting for the stars, diversify your portfolio by style, geography and most importantly by asset class. The biggest component for most portfolios is asset class diversification, primarily the combination of equities/stocks and bonds.

Related articles

Market Ethos

Bonds-equities: Diversification is harder to come by

July 8, 2024. Market Ethos. The 2020s have seen a dramatic move higher in correlations between equities and bonds – in both returns and magnitude.…

2 minute read

Market Ethos

Déjà vu

June 25, 2024. Market Ethos. Using the 1990s dotcom bubble as a loose comparison, is this 1997, 1998, 1999 or 2000? Are the four horsemen…

2 minute read

Market Ethos

Is inflation beat? Not so fast.

June 17, 2024. Market Ethos. We think inflation might cool more, but counter forces will probably limit the improvements. If the economy reaccelerates, inflation could…

2 minute read