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In recent years, the notion of “correct” portfolio construction has been challenged and diversification has become unpopular. Stocks and bonds have shown an increased propensity to move together, calling into question the efficacy of the classic “60/40” portfolio. Moreover, sustained outperformance in select segments of global financial markets has caused portfolios to drift away from target allocations and left many investors with little motivation to allocate elsewhere. However, with a new year comes new forces driving markets, and the winners of the past may not be the winners of the future. To prepare portfolios for any unforeseen risks that may arise in 2025, diversification remains the best option, although the ways in which investors can diversify may look different than before.

To share his thoughts on diversification in the year ahead, Dr. David Kelly is joined by Jack Manley, Global Market Strategist here at J.P. Morgan Asset Management.

Resources:

Explore the full Investment Outlook here.

Subscribe to the Notes on the Week Ahead podcast for more insights from Dr. David Kelly: Apple Podcasts | Spotify

Watch the video version on YouTube.

The pandemic, geopolitical tension and climate change have revived industrial policy around the globe. In the U.S., the IIJA, IRA, and CHIPs act collectively represent the largest investment in infrastructure since the Cold War. In particular, there are significant opportunities in modernizing and expanding the electrical grid as decarbonization and data centers drive up demand. In addition to these secular tailwinds, core infrastructure’s steady, uncorrelated cash flows make it a valuable portfolio diversifier. Today, Dr. David Kelly is joined by Chris Simard, an Investment Specialist in the J.P. Morgan Infrastructure and Investment Group, to parse through all of this and more.

Resources:

• For more resources on Alternatives, visit our Guide to Alternatives and Principles of Alternatives Investing
• Subscribe to the Notes on the Week Ahead podcast for more insights from Dr. David Kelly: Apple Podcasts | Spotify