Great ‘Bear Market’ in Diversification Haunts Wall Street Pros
- Mixed-asset model is trailing S&P 500 in 13 of last 15 years
- Investor behavior is changing amid supremacy in US equities
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They did everything right — spreading out bets far and wide across bonds and equities in case things went south. Now, after heeding Wall Street’s mantra to diversify for the long haul, these investors are watching with envy as the US stock rally leaves them in the dust yet again.
The numbers are stark. Money managers who obeyed the financial industry’s age-old wisdom to divide investments across markets and geographies are on an epic losing streak versus those who simply bought the S&P 500 and sat still. In one example, out of roughly 370 asset-allocation funds tracked by Morningstar Inc., just one has managed to beat the index since 2009.