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Because in diversified portfolio, to loose it all the following must happen. All listed companies must have completely collapsed. Goverment must have basically

• msandford 11y ago
  Right but these days there's a lot of correlation between assets and all the big moves happen in response to monetary policy. In an environment where everything doesn't hinge on extremely low interest rates I'm in total agreement, but you're really exposed to policy risk in the market right now.
  • UK-AL 11y ago
    I agree that many assets are now correlated stocks and bonds for example. But for a bond to go to absoulte 0, would take a lot. Also I'm not sure that small increases in the interest rates would that much of a disaster. We've been in situations with low interest rates before, and increments in the interest rate didn't harm stocks in the long term. In many ways it's a positive indicator, that goverments see a positive future. When the fed announced that the interest rates were on hold. Stocks went down. There is a lot of lose money in the system though from low interest rates.