Julian Howard: The new capital preservation

Numerous studies conclude that the long-run return from equities lies somewhere around 7% a year after adjusting for inflation. Equities should indeed continue to deliver strong returns over time but market conditions have evolved. Expected volatility, together with the increasing correlation between equities and bonds, and the long decline in bond yields, cast doubt over the reliability of the traditional equity diversifiers to keep delivering when the road gets bumpy. Where then should investors turn to for a portfolio dampener to smooth out their expected return profile? What is the n...