Thinking about All Weather strategy, I looked at a number of financial asset indexes and their prices over the past year:
- US Stocks
- US Medium-term (7-10 year) Treasury Bonds
- US Long-term (20+ years) Treasury Bonds
- US Inflation Protected Treasury Bonds
- US High-quality Corporate Bonds
- US Real-estate
What I see is that they all essentially dipped at the end of 2018 and then came back and have gone up considerably. Something like 50% change the prices. And there seems to be a lot of correlation between the price of these assets.
Can someone explain why all these assets are acting with such a high correlation? Is it essentially just the changes in the real value of cash and its usual volatility that makes these assets look so highly correlated? If so what is causing that? It is rapid mood swings between psychological euphoria and fear of a bursting bubble?