(Harvest) Combining bonds with other equity-risk-mitigation strategies may be more efficient than any single approach. With stocks hitting record highs, many investors want to mitigate the largest source of risk in their portfolios – equities. In recent decades, fixed income has served this purpose well. The asset class has generally delivered both positive returns and negative correlations with equities. However, our research finds that combining additional asset classes may enhance the diversification and efficiency of hedging portfolios.
Hedging for Profit: A Novel Approach to Diversification
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