Barron's Advisor Alex Shahidi: How to Build a ‘Truly Diversified Portfolio’
Apr 7, 2026
Alex Shahidi, co-chief investment officer at Evoke Advisors and host of Insightful Investor, explains portfolio construction and diversification. He challenges the 60/40 myth and outlines principles for true diversification. Topics include hedging growth and inflation, using TIPS and gold, balancing public/private/hedged strategies, and behavioral rules like rebalancing and long-term discipline.
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Diversify By Return Drivers Not Correlation
- Diversification depends on what drives asset returns, not just historical correlation, because correlation shifts with economic regimes like inflation or growth surprises.
- Build portfolios with assets that win when growth is strong and others that win when growth is weak, targeting bias to different surprises.
Diversifiers Can Add Returns When Stocks Are Expensive
- Because U.S. equity valuations are relatively high, diversifiers can both reduce risk and potentially increase returns versus a concentrated U.S. equity bet.
- Owning inflation hedges and non-correlated assets may enhance long-term portfolio outcomes when stocks are expensive.
Rebalance Into Diversifiers When They Drop
- Do assemble assets that each perform under different plausible outcomes and rebalance into losers to capture long-run gains.
- Expect volatility in diversifiers and plan to buy more when they fall instead of selling from recency bias.