Not unlike March 2020, but to a much lesser extent, diversification has stopped working in the third quarter as the markets (plural, i.e., beyond stocks) seem to have gone into risk-off mode. October has not been much better so far, even though stocks have found some support.
I believe that weakness in multi-asset diversification will likely persist until (1) asset prices correct to levels that are more consistent with the reality of the economy in a year of global pandemic and deep recession, and (2) the end of the electoral cycle in the US.
Check out my full article on Seeking Alpha for a more detailed discussion.
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