The Folly of Gaming Diversification

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Global Perspectives is devoted to helping prevent investment mistakes we refer to as the “Folly of Gaming Diversification”. Examination of fund flows, market performance and cash on the sidelines shows that investors have great difficulty timing the market, especially during the bull market run since the end of the Credit Crisis. We advocate and show the results for a broad, globally diversified strategy.

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Returns for a globally diversified strategy over the last 10 years refute the notion of a “lost decade”.
Returns for a globally diversified strategy over the last 10 years refute the notion of a “lost decade”.
The excess of M2 over M1 money supply data shows record levels of cash on the sidelines, while equity mutual fund flows show extreme swings that highlight investors’ reactions to stock market performance.
The excess of M2 over M1 money supply data shows record levels of cash on the sidelines, while equity mutual fund flows show extreme swings that highlight investors’ reactions to stock market performance.
A broadly diversified global strategy produced better performance — with lower risk — than a common mix of U.S. large-cap and EAFE equities plus corporate bonds.
A broadly diversified global strategy produced better performance — with lower risk — than a common mix of U.S. large-cap and EAFE equities plus corporate bonds.

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