The Argument for a Mixed Bag

The Argument for a Mixed Bag
Charts by David Foster

Trying to find cover in this market is like trying to stay dry in a monsoon. Stocks, bonds, and real estate are all getting whacked. Even commodities, which often zig when equities zag, are plummeting along with stocks. That doesn't mean you should abandon alternative asset classes such as real estate and commodities. By diversifying, you can lower overall risk. Consider the current market. Stocks are off 50% from their peak in November 2007; commodities are down about 30%. The upshot: A portfolio with a dose of oil, gold, and other commodities outperforms one with just stocks. Here's a look at one-, five-, and 15-year returns for various asset allocations as of Nov. 30.

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