Asset Class Correlations In Diversified Portfolios

Thank you, Craig. I particularly benefited from and enjoyed the exercise in which Craig began with the large cap stock holding and then added incrementally the lowest correlated asset classes beginning with TIPS, then cash, etc. It was interesting to see how a 20-80 portfolio did in 2008, and also how adding the more correlated asset classes reversed the direction of the standard deviation and increased the 2008 loss. This sort of illustrative explanation is very useful in getting the point across.

Excellent. Craig always makes you think deeply about areas and assumptions that we often take for granted.

great information