True Diversification
“I only have one piece of advice. Diversify. And if I had to offer a second piece of advice, it would be: Remember that the future will not necessarily be like the past. Therefore, we should diversify.”
- Harry M. Markowitz, pioneer in modern portfolio theory
Investors often make the mistake of investing solely in equities and bonds. However, there are other methods that can help diversify your portfolio and improve your returns. At Zindel Capital, we take advantage of every opportunity to diversify with robust and uncorrelated sources of return, by looking beyond traditional portfolios. Our methods of diversification include:
Let’s not remain at qualitative arguments, with the following formula we can measure the goodness of diversification of different portfolios:
The above formula will indicate very good diversification when approaching 1 and very bad when approaching 0. If you would like to know more about the derivation of the above formula, please click here.
Now we can scrutinize some typical portfolios and how they compare:
Diversification is the most important tool to obtain the risk-adjusted returns everyone is looking for in a portfolio. With the Zindel Global Diversified Strategy you can get more diversification through a single instrument.