Asset Allocation for the Long Haul

David Ranson will provide his unique insights into asset allocation strategies for long-term investing. The tradeoff between portfolio risk and return can be stretched greatly by including an inversely correlated asset. During financial crises and recessions, it’s true that correlations between the performance of risk assets converge toward 100%. But safe-haven assets such as government bonds do not share this property and mitigate drawdowns. Further sources of diversification, especially in times of unstable currencies, include hard assets such as commodities and securities in foreign currency zones. Inverse correlations tend to be consistent and long-lasting, and asset mixes that are designed to exploit them can produce surprisingly high ratios of return to volatility.