Asset Allocation: Is It Really Different This Time?
by Mark Hulbert
And while it is always healthy to engage in such a re-examination, the process tempts investors into proclaiming what, in effect, are the four most dangerous words in the investment world: This time is different.
A case in point is the notion that there has been a fundamental shift in the relationships between the various asset classes. Because of the increased inter-connectedness of modern global markets, so the argument goes, assets that were previously uncorrelated have now become significantly correlated. As a result, traditional asset allocation strategies do not immunize investors from risks the way that they used to.
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