All of a sudden everyone’s an expert on correlation and what’s moving with or against what. I’ve fought my share of battles about it here on TRB and over in the faculty lounge.
Factor Advisors (the team behind the actively-managed ETF suite called FactorShares) just put out a fantastic rundown of charts making the point that only a handful of asset classes have been moving against the S&P 500 index of large cap stocks and most asset classes have been moving with it – but lagging in the process. I have been harping on this theme for months now – my client portfolios have been and will be allocated based on this reality until I see otherwise.
Check this out:
Click here to download the whole report from Factor Advisors, it’s great stuff: