MichaelVitali.net | Nouveau portfolios | MichaelVitali.net

Nouveau portfolios

The traditional differences in market behavior between stocks and bonds are what drives the power of diversification in an investment portfolio. But all that is over, at least for now — the financial crisis made most asset types move in lockstep, thereby defeating the magical benefits of diversification.

Exotic times call for exotic investments. Sans tongue in cheek, the following alternative investment asset classes are proposed as offering true non-correlation in an investment portfolio, as proven by several hedge funds:

  1. Wine
  2. Chocolate
  3. Arable farmland
  4. Art
  5. Rock and roll paraphernalia

This will be a short-lived trend because the only thing more variable and unreliable than asset managers’ returns on investment is their taste in modern art. It appears that the market for third-rate Warhol and Hirst and Koons is exclusively a Wall Street (and London) phenomenon — no one else would pay these kinds of sums for such questionable value. And “one of Michael Jackson’s sofas” as a viable long-term investment opportunity? Please.

Tags
Recent Comments
Leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *