I’ve been trying to diversify my portfolio, but I’m not sure I understand non-correlated assets.
Are there any specific examples of assets that typically don’t move together? I’m hoping to balance out my risks better.
How do you all approach this in your own portfolios?
Been trading for a couple years now, and non-correlated assets are key for managing risk.
Stocks and bonds tend to move differently. When my tech stocks take a hit, my bond ETFs often cushion the blow.
Adding some gold to the mix has helped too. It’s not perfect, but spreading things out like this has kept my account more stable overall.
Just gotta find what works for your style and risk tolerance.
Gold and tech stocks work well for me. When tech dips, gold often goes up. My portfolio’s about 60/40 split between them.
When I started out, I thought diversification meant just buying different stocks.
Big mistake. Lost 30% in a week when tech crashed.
Now I mix stocks, bonds, and commodities. Gold’s been my safety net lately. When my stock trades tank, gold usually rises.
Still learning, but this approach has smoothed out my returns.
Non-correlated assets move independently of each other. Stocks and bonds are classic examples. When stocks tank, bonds often rally. Real estate and commodities like oil can also provide good diversification.
I keep it simple: 50% stocks, 30% bonds, 20% commodities. This mix has kept me profitable through several market cycles. Don’t overthink it - just make sure you’re not too heavy in any one area.
Remember, perfect non-correlation is rare. Focus on assets that generally move differently. And always keep some cash on hand for opportunities.
Non-correlated assets:
• Stocks vs bonds
• Developed vs emerging markets
• Commodities vs equities
• Real estate vs stocks
Aim for 3-5 asset classes. Rebalance periodically. Monitor correlations over time.