Please stay tuned for important disclosure information at the conclusion of this episode.

Welcome to Investing Insights. I'm your host, Ivana Hampton. Different asset classes bring their own diversification benefits and risk to portfolios.

Investors looking to hedge their bets

can turn to non-US stocks, commodities, and crypto. How have these assets performed in the past

few years? And what should you know if you're considering adding them to your portfolio?

Three Morningstar researchers examined that in the 2024 diversification landscape report,

Amy Arnott is one of the co-authors and a portfolio strategist for Morning Star Inc.

Here's our conversation.

Thanks for joining me, Amy.

Great to be here.

So let's start with the benefits of diversifying and beyond U.S. stocks and bonds.

Yeah, so one reason is to make sure you have exposure to a variety of asset classes

because you never know what's going to be in favor or out of favor in any given year.

So holding a diversified portfolio can help you

mitigate the risk of being overexposed to any one particular area. Holding a diversified

portfolio can also help reduce your portfolio's overall risk profile. So if you are holding

assets that have less than a

perfect correlation, so if their correlation coefficient is less than one, that can help reduce

your portfolio's overall level of risk. So diversifiers are supposed to move in the opposite

direction of stocks, right? Which asset classes did your team find that really didn't do that?

Yeah, well, first I would say it's very difficult to find asset classes that move in the

opposite direction from stocks, which, you know, if they did that all of the time, that would

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