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3 Ways to Diversify Equity Risk

Susan Dziubinski

Given the stock market’s rocky performance last year and the volatility we’ve experienced during the past several weeks this year, investors may be thinking more about risk than they have in the recent past. Specifically, some may be looking for ballast for their equity positions.

Last week, Morningstar director of personal finance Christine Benz took a fresh look at Morningstar’s asset class correlation data, in an effort to find the best ways to diversify equity risk. She found that plain-vanilla, high-quality bonds have been the best diversifiers for equity-heavy portfolios during the past decade.

Susan Dziubinski does not own shares in any of the securities mentioned above. Find out about Morningstar's editorial policies.