Thus, he says, investors tend to under-estimate the potential fordiversificationstrategies when the economic going is tough, and to over-estimate it when things are booming.
The company also recognized that it needed to have capabilities distinct from its gaggle of smartphone competitors, so it embraced a merger with HP without plumping fordiversificationstrategies such as the ones Motorola pursued.
One of its key conclusions: Investors looking for opportunity and diversification in emerging markets should consider active investment strategies, rather than passive ones.
In other words, not only can you find low-correlation sector pairings to provide true diversification, they allow for a granularity in risk management that is unavailable in traditional equity strategies.
This calls for investors to revisit their portfolio strategies to incorporate a wider range of asset classes and sectors to help provide the diversification and risk adjusted return potential that is needed to navigate these uncertain and volatile markets.