Beyond 60/40: Diversify, diversify, and diversify again

The 20th-century pioneer investor Sir John Templeton famously said: "The only investors who shouldn't diversify are those who are right 100% of the time."  Unfortunately, in the fund management industry, we operate in a world where even some of the very best portfolio managers only get around 60% of their stock selection decisions right. This success rate is even lower when it comes to fund managers making heroic asset allocation calls. In the 1950s, in creating his Modern Portfolio Theory, Nobel Prize winner Harry Markowitz introduced the concept of creating the ‘optimal portfolio' w...