The core portfolio allocation for moderate investors has traditionally been a 60% equities and 40% fixed-income mix. But changing market dynamics may pose a challenge to this construct going forward for three reasons: increased volatility, low interest rates and high correlations. To more effectively respond to changing market dynamics, traditional asset allocation models may require adaptation. Financial advisors are catching on to this idea and adding alternative assets to their clientsÂ’ portfolios.

INCREASED VOLATILITY, RISING RATES, HIGH CORRELATIONS

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