Agcapita

Diversification Is Your Only Friend

Difficult to obtain diversification in a market with high postive correlations between virtually all asset classes. This is a very unusual state of affairs. There are very few uncorrelated assets classes accessible to the average investor. For example, timberland and farmland have small negative correlations to stocks and fairly high correlations to inflation - might be something to consider going forward in a market with a federal government dedicated to inflating the currency away. The challenge becomes how to cost effectively deploy capital in these areas.