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John Mauldin's Outside the Box

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  • When Career Risk Reigns

    We have entered an era of increasing correlation among what were once considered diversified investment classes. That would not be so bad, but overall returns have been reduced as well, almost across the board. As the song says, “Nowhere to run and nowhere to hide.” (For the younger generation, listen to the far superior version on YouTube, which was the original by Martha Reeves and the Vandellas, and not the noise of Korn or Caliban.)

    This week’s Outside the Box takes us on a tour of recent research, which shows that correlations among a wide variety of asset classes are increasing. It comes as no surprise to serious investors that it is getting ever more difficult to construct a diversified portfolio. My friend and partner Niels Jensen of Absolute Return Partners in London looks at half a dozen different research papers of recent vintage to give us some insights into today’s investment climate and offer a few modest suggestions. All in all, a very useful piece of work. You can see more of their writing and research at www.arpllp.com.

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