Diversification has been described as the one free lunch in investing. True, the interconnected nature of the global economy means there is greater correlation between market movements now than in the past. But spreading your risk across different regions and asset classes remains a crucial part of successful investing.
Part 5 examines Modern Portfolio Theory and the research carried out by the likes of William Sharpe, Eugene Fama and Ken French into the common factors that drive market returns.
See Part I, Part II, Part III and Part IV here.
