Diversification Doesn’t Work Anymore

Posted on by The INO.com Team

AND HERE’S WHY

Investors have been told for years that diversification lowers risk. While that may be true in certain instances, it certainly isn't true in the world equity markets.

Let me give you an example: Had you purchased the five ETF's that we track in MarketClub's "Global Strategy Portfolio" on January 2, 2008, you would have seen your equity diminish 29% in the space of 30 months. However, had you followed the "Global Strategy Portfolio" with the same five ETF's, you would have seen your equity grow 23% in the same time-frame. With a 52% difference between the potential for profit and the potential loss, those are numbers that no investor can ignore.

As the strategy name suggests, these five global ETFs in question could not be more diverse. We refer to these five ETF's as BRICA since they represent Brazil, Russia, India, China and Australia.

So what makes the MarketClub's "Global Strategy" different from a buy and hold strategy? The big difference is that you're not in the market all the time. In fact, you are only in the market about 50% of the time based on MarketClub's "Trade Triangle" technology which will tell you when that particular ETF is headed higher.

When the market is headed down on the other hand, you are safely on the sidelines sitting in cash or an interest-bearing instrument and waiting for a signal to re-enter.

Every Success,
Adam Hewison
President of INO.com
Co-founder of MarketClub

11 thoughts on “Diversification Doesn’t Work Anymore”

  1. I would suggest that people interested in following the proposed Global Strategy Portfolio take the time to test how this strategy/portfolio would have done prior to Q1 2008 before deciding to follow it. Some of the ETFs were tracked by Market club as far back as 2005, using this data the picture does not look as rosy as the one painted in the linked report. Basically due your own due diligence.

  3. You mentioned in the last webnaire that you would have a follow up in the blogs on the status of the portfolio. Will there be a periodic review between flag changes? Also do you plan follow ups on your other portfolios i.e. the one with uso, gld?

    1. Nick,

      We are currently working on these pages. They will include Daily reviews of positions and Triangles along with stops. We will include the USO and GLD as well.

      Best,
      Jeremy

      Jeremy Lutz
      Head of Technical Support
      MarketClub and INO.com

  5. I am also wondering where info on this portfolio is located. In the report from this video is says that after becoming a member that "In addition to the “Global Strategy Portfolio,” you will also have access to the “Perfect Portfolio” and MarketClubʼs “World Cup Portfolio” which are all designed to be easily followed and tracked. " I am already a member but do not know where I can access these portfolios mentioned.

    1. KO,

      See my replies to Ross and Sam below. We will also be supplying a PDf for the WCP in the near future. In the mean time if you search World Cup Portfolio on this Blog you will find all the info that you need.

      Cheers,
      Jeremy

      Jeremy Lutz
      Head of Technical Support
      MarketClub and INO.com

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