Contrarian: A new way of looking at risk

CONTRARIAN

If we are to believe academic economists, in the dim and distant past investors tended to ignore ideas like diversification.

Then we, the dim masses, were bathed in the glorious light of portfolio theory and diversification became the key. The disciples of portfolio theory did say unto the masses that “various academic studies have shown more than 90% of a portfolio’s return can be derived from sensible diversification between assets”. And merrily did we feast upon this free lunch of wisdom/asset allocation and go about building new portfolios around life cycles, target dates, and other such innovations. But then a strange series of events occurred. After 2008, we collectively experienced terrific loss...