In some market conditions, diversification can go completely unrewarded. Indeed, in the short term, making the right choice – building a robust total portfolio – can often actually seem to cost both returns and money. If the obvious single asset performs the best, then in pure results terms, diversifying from that asset leaves us worse off in the short term, even if the actual portfolio had a much more robust design.
None of us knows with certainty what the markets will bring in the next few years. We believe, that every client should cast a critical eye over their portfolio construction to ensure that it’s ready for the return of volatility.