Correlation Shifts Require New Approaches
Many clients are seeing more volatility in their portfolios. This is perhaps caused by a shift in the correlation between bonds and equities over time. A decade ago, the correlation between Treasury bond returns and stock returns was significantly negative at minus 60%. This has since dwindled to just minus 28%, while cash has become increasingly popular. For more on how this change impacts position size and asset allocation decisions, watch Greg Kaldor in the video below.
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