News about portfolio diversification

Vanguard's 10-year forecast projects annualized U.S. stock returns of 4.8% to 6.8%, considerably lower than the 15.4% annualized return the S&P 500 has delivered since 2015. U.S. Treasury bonds are expected to return 3.8% to 4.8% annualized, while developed-market stocks outside the U.S. could deliver 5.3% to 7.3% annualized by 2035. Canada's S&P/TSX Composite gained 17.72% over the past year as of mid-October, versus 12.12% for the S&P 500. UBS expects $1.2 trillion of capital to rotate from U.S. to European equities over the next five years. The article notes U.S. investors hold just 15% of their portfolios in international stocks, and argues that diversifying away from domestic stocks could be a good idea.

CNBC's Jim Cramer said this week's AI stock turbulence shows why investors should avoid putting all their money into the market's hottest trade. On Thursday, Kimberly-Clark rose 4.7%, Waste Management gained 3.9% and Eli Lilly advanced 3.6%, while the iShares Semiconductor ETF (SOXX) fell for an eighth straight day, its longest losing streak in more than a decade. The CNBC Investing Club's Charitable Trust sold Corning on Sept. 1 and bought Kimberly-Clark, and since then Corning has fallen almost 5% while Kimberly-Clark has gained more than 10% from its Oct. 1 low. Cramer acknowledged it is unclear how long the rotation away from AI will last, but warned that overconcentration could lead investors to give up on the asset class altogether.