Re:Stocks Are Recovering While the Economy Collapses
by wcoenen on Friday May 01, 2020 @08:55AM
(#23041493)
> This could explain why all asset classes are now moving in unison
I think this happens just because of portfolio balancing. If stocks in a balanced portfolio do better than other asset types (e.g. government bonds, corporate bonds, gold, commodities, ...) then some stocks will be sold and more of the other assets will be bought. Vice versa if stocks do worse. This behavior increases correlation between all asset types.
I think this happens just because of portfolio balancing. If stocks in a balanced portfolio do better than other asset types (e.g. government bonds, corporate bonds, gold, commodities, ...) then some stocks will be sold and more of the other assets will be bought. Vice versa if stocks do worse. This behavior increases correlation between all asset types.