I have noticed there seems to be quite a correlation lately with most asset classes. I've heard this explained by everything from baby boomers withdrawing at the same time, china and middle east slushing around cash, LBOs/hedge funds etc...
My thought is that historical correlations have been very different from today sheerly because of a lack of easy investment vehicles into many harder-to-find asset classes. Today, you can find an ETF for any class you can think of including derivatives and shorting/bear funds. I've even heard word that they might make an ETF based on some Art index!
Do you all agree that ease of access is why the correlations are starting to line up? And if you buy into this argument, do you forsee any reason to change asset allocations based on this?
Everyone and his mom can basically go to smartmoney/ameritrade/vanguard, enter their age and risk profile and get a generic portfolio which is basically inline everyone else and their mom. So, if we are all in the same asset classes, in roughly the same percentages based on historical correlation matrices, is it some kind of self fulfilling prophecy that we'll all underperform, and at the same time, match each other?
Sorry for the babbling, but wanted to get my idea out while it was fresh in my mind.