The diversification that looked sound on paper may not hold when markets come under stress.
As geopolitical tensions escalate and global markets adjust to a more fragmented world order, investors are reassessing how portfolios behave during periods of systemic pressure. While many focus on traditional safe-haven assets during crises, the deeper question is how portfolios are structured for environments defined by strategic rivalry, energy disruption and sustained macro volatility.
In a recent Investor Strategy News article, ECCM CEO Simone Haslinger argues that most portfolios carry an implicit assumption that diversification across asset classes will provide protection when conditions deteriorate — an assumption that holds in stable regimes but often breaks down under stress. True diversification, she notes, is not simply about holding more assets. It is about holding assets that behave differently when conditions become difficult.
Read the full article here.