11.19.2009 | Diversification - Not What You Might Think

Notice how highly correlated so-called "alternative assets" are to the equity markets and how difficult it is to find negative correlation (code word for "diversification") right now. Worth reading in its entirety. MB

_______________________________

In the 11/18/09 Financial Times:

 

LESSONS OF INVESTING ARE IGNORED By Richard BernsteinPublished: November 18 2009 21:00 | Last updated: November 18 2009 21:00

The recent rally in financial markets is giving many investors a false sense of security. Their asset allocations are once again being unduly influenced by short-term momentum. One might think that the rally would be an opportunity for big investors such as pension funds and endowments to sell into strength previously troubled and illiquid alternative assets or correlated high-beta investments, to restructure their portfolios more efficiently to fund liabilities. Unfortunately, the lessons of the past several years have not been learned.

This article can be found at:
http://www.ft.com/cms/s/0/a8ad8980-d481-11de-a935-00144feabdc0,_i_email=y.html

"FT" and "Financial Times" are trademarks of The Financial Times.

 MB