Finding shelter from stormy markets is getting harder than ever

Rising correlations threaten traditional asset allocation models like 60% stocks, 40% bond portfoliosAP Photo/Jeff Chiu

Diversifying your portfolio is getting a lot tougher.

Major asset classes have been trending together to levels rarely seen over the past decade and, more often than not, that trend has been down. Investors who enjoyed easy gains as markets rose in sync in the past six months are struggling to find securities that move in opposition, leaving them exposed to losses even if they’re diversified.

Once immune to geopolitics, proposed U.S. tariffs have sent global stock markets lower. But bonds have aren’t offering much of a fallback option, as reflationary threats and hawkish central banks hobble returns. Hoping commodities will provide a haven? Too bad. Crude and copper futures are extending losses after a hefty February decline.

Top