{"id":16973,"date":"2010-12-16T15:53:32","date_gmt":"2010-12-16T20:53:32","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=16973"},"modified":"2010-12-16T15:53:32","modified_gmt":"2010-12-16T20:53:32","slug":"new-report-its-dangerous-to-diversify-find-out-why","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/12\/16\/new-report-its-dangerous-to-diversify-find-out-why\/","title":{"rendered":"New Report: It\u2019s Dangerous to Diversify \u2014 Find Out Why"},"content":{"rendered":"

A free report from Elliott Wave International reveals the risks of portfolio diversification <\/span>
\n December 16, 2010 <\/span><\/h3>\n

By Elliott Wave International<\/span><\/h3>\n

Despite near-unanimous endorsement among mainstream advisors, the strategy of portfolio diversification has a huge, glaring flaw: Namely, when large sums of liquidity begin to flow into global investment markets, formerly disparate trends become strongly correlated. And markets that go up together ultimately go down<\/em> together; in turn, the value of diversified portfolios goes down with them.<\/p>\n

For years now, Wall Street has tap-danced around the liquidity risk. Here’s how former Citigroup CEO Charles Prince described it in July 2007:<\/p>\n

“When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance.”<\/em><\/p><\/blockquote>\n

Three months later, Prince announced that Citigroup’s quarterly earnings would be down 60%. Within the year, Prince had danced himself out of a job. Diversified investors around the world were feeling the liquidity crunch.<\/p>\n

But after many miserable months for stock and commodity investors, the markets rebounded together — almost in lock-step. Commodities lifted off in late 2008, and stocks followed in March 2009. Everything that declined together was going up together, and market watchers began to take notice.<\/p>\n

“Liquidity with respect to stocks has become indiscriminate,” reported a widely respected market technician. “When money’s flowing in, they all go up. When money’s flowing out, they all go down.”<\/p>\n

Mainstream investors finally began to recognize the phenomenon Elliott Wave International’s Robert Prechter warned about in his 2002 best-seller, Conquer the Crash<\/em>.<\/p>\n

Turns out, now almost 10 years after Prechter coined the phenomenon “All The Same Markets,” the correlation is still positive. Unfortunately for millions of diversified investors, the outlook is not.<\/p>\n

According to a new report authored by Prechter and his EWI colleagues, the second round of liquidity crisis is fast approaching and perhaps has already begun. If you invest your money in a diversified portfolio, it’s time you read this incredible new report now.<\/p>\n

Follow this link to instantly download this special free report, Death to Diversification — What it Means for Your Investment Strategy<\/a><\/strong><\/p>\n

\n

This article was syndicated by Elliott Wave International and was originally published under the headline New Report: It’s Dangerous to Diversify — Find Out Why<\/strong><\/a>. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.<\/em><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Despite near-unanimous endorsement among mainstream advisors, the strategy of portfolio diversification has a huge, glaring flaw: Namely, when large sums of liquidity begin to flow into global investment markets, formerly disparate trends become strongly correlated.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-16973","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/16973","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=16973"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/16973\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=16973"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=16973"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=16973"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}