Did Diversification Fail When We Needed It Most?

Did Diversification Fail When We Needed It Most?

Investors may doubt the usefulness of diversification after the recent market decline. In this video, Kenneth French explains that diversification cannot reduce the volatility of the overall market, but it is still important because it reduces the risk associated with individual firms or asset classes. He also discusses the perception that correlations between assets rise when market volatility is high.