Hedge Fund Portfolio Density and Turnover Hedge fund portfolio density has steadly increased, and fund turnover has declined over the past decade. High concentration risk can lead to high losses and affect the financial system. Picture source: Goldman Sachs
Ideal Portfolio – Stocks as Percent of Retirement Portfolio by Age For the ideal portfolio, GMO recommends the following stocks as percent of retirement portfolio by age. Source: GMO LLC
What Are the Advantages of a Geographically Diversified Portfolio? A geographically diversified portfolio may minimize drawdowns and the amount earned from compounding may grow faster over time. Picture source: Bridgewater Associates, LP
‘We are entering into the later market cycle,’ says portfolio manager Mike Morey, CIO of Integrity Viking Funds, says why investors should be more risk averse at this point of the cycle. https://www.youtube.com/watch?v=g_vVdwtu6SM
Correlation Between S&P 500 Index and MSCI EAFE Index Since 1997, the high correlation between U.S. and international equity markets suggests that the MSCI EAFE may only offer a slight risk/return benefit as a complement to a U.S. equity portfolio. Picture source: First Eagle Investment Management, LLC
Heightened Correlations to U.S. Treasury Implied Volatility (MOVE) Followed by Higher Yields This chart suggests that balanced portfolios could suffer as U.S. Treasury yields generally rise after heightened correlation. Picture source: Arbor Research & Trading LLC
VIX and MOVE Correlation Periods of high correlation between VIX and MOVE are not good for balanced portfolios, because diversification is hard to find. Picture source: Arbor Research & Trading LLC
Annual Performance of Gold and the S&P 500 since 1980 One of the advantages of gold is that it is uncorrelated to the U.S. stock market and provides diversification in a portfolio. Picture source: The Wall Street Journal
The Value of Diversification This chart shows that a 60/40 portfolio has slightly outperformed the S&P 500 since 2018. Picture source: Fidelity Investments
Correlation Between S&P 500 and U.S. Treasuries This chart shows the correlation between stocks and bonds, which could affect a balanced 60/40 portfolio. Picture source: Arbor Research & Trading LLC
