Not exact matches
Efficient portfolio
diversification is
achieved by combining
asset classes that are not perfectly correlated or are, ideally, negatively correlated.
By adding other
asset classes such as real estate, bonds and commodities, you
achieve even greater
diversification.
It seems to me (I don't know of any studies to back up my claim) that once a certain level of
diversification is
achieved, adding more
asset classes is likely to fall prey to the law of diminishing returns.
At StashAway, we devote ourselves to identifying the right mix of
asset classes for a given economic regime, because the appropriate selection of
asset class mixes is vital for a portfolio to
achieve effective
diversification over the long term.
Once a certain level of
diversification is
achieved, adding more
asset classes may not give more benefits.
Efficient portfolio
diversification is
achieved by combining
asset classes that are not perfectly correlated or are, ideally, negatively correlated.
Diversification into various
asset classes and markets would be an appropriate strategy to potentially assist the individual in
achieving an overall targeted return,» said Mr Chua.
This year's model portfolios (see «Best bets for your RRSPs «-RRB-, which I prepare each year, help you
achieve optimal
diversification among
asset classes, sectors and geographies.
In effect, the various
asset classes provide additional
diversification benefits that go beyond the investment risk reduction benefits that can be
achieved through full
diversification within each individual
asset class.
Modern Portfolio Theory postulates that the key to
achieving an efficient portfolio is
diversification between non-correlated (or negatively - correlated)
assets classes — broad categories of investments that share few similarities in their performance.