For years, diversification has been one of investing’s oft-repeated principles. The logic has always been intuitive. Equities deliver growth. Bonds provide stability. Gold acts as a hedge during periods of uncertainty. Put them together in a portfolio, maintain discipline through market cycles, and let the portfolio absorb shocks from any single market event.
Yet market history shows that leadership rarely remains with a single asset class for long. Different economic environments reward different assets, often in ways that are difficult for investors to anticipate. Despite this, many investors continue to hold portfolios whose allocations change little, regardless of how dramatically market conditions evolve.
