Stock/Bond Diversification

Diversification is often labeled the one free lunch in investing. Spreading your investments across different kinds of asset classes that don’t all move in the same direction has been heralded as a way to reduce downside risk and enhance longer-term returns - and history has proven this claim. However, many investors feel that 2022 has challenged the diversified stock/bond portfolio.

This week's highlight article from JP Morgan explores the question that is on everyone mind: Does stock/bond diversification continue to make sense? This article identifies the drivers behind "diversified disappointment" and argues that these headwinds may not be likely to persist.

Gassed Out?

Perhaps the first glimpse of relief at the pump, we've seen gas prices trending down since mid-June. While gas prices are indeed down, they're still up much more than usual year-to-date. From a seasonal perspective, this is normally a time of year when gas prices are trending lower, so this year's drop is not out of the norm. In the chart below, the red line shows this year's change in gas prices, while the blue line shows the average pattern that gas prices have taken throughout the year going back to 2005.

What Else We're Reading

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