Diversification in the Digital Age: Why Old Strategies No Longer Work
The concept of diversification has long been a bedrock of smart investing. For decades, spreading investments across a diverse mix of asset classes , industries, and geographies has been considered the most effective way to manage risk. Investors were taught that diversification could protect them from sudden market downturns while offering stable, long-term growth. However, the financial world has undergone significant changes. In the face of technological innovation, global interdependence, and evolving investor behavior, the old rules no longer apply in the same way. Diversification remains essential—but how we achieve it must now reflect the realities of a rapidly changing economy. The Impact of Global Market Integration In the past, investing across different countries and regions seemed like a reliable way to reduce portfolio risk. Local economic conditions, political events, and domestic policies once primarily influenced markets in Asia, Europe, and North America. That separati...
