It time for the TALK again ,the Fund Manager Full Employment Act (Asset Allocation theory)

Another hole in the Fund Manager Full Employment Act (Asset Allocation theory) has popped up in recent months, according to Bloomberg News, ”The average daily correlation of returns for Morgan Stanley Capital International's World and Emerging Markets Indexes has climbed to the highest since at least 1988. The S&P 500 and Japan's Nikkei 225 Stock Average, along with the Nikkei and Europe's Dow Jones Stoxx 600 Index, are tracking each other's daily returns by the most since at least 1987, data compiled by Bloomberg show. Shares in the U.S. and Europe have the second- highest correlation in 20 years.” Also according to the same source this year, the average daily correlation between the MSCI World gauge tracking developed markets and MSCI's measure of emerging markets increased to 0.87, according to Bloomberg data, which dates back to 1988 for that comparison. A correlation of 1 means stocks are in lockstep, while minus 1 indicates stocks are moving in opposite directions. So it seems proof that global markets are more correlated than ever before. As I have said many times when your broker gives you the talk (Asset Allocation Theory) better take a walk.