| Description |
This thesis examines the effectiveness of portfolio diversification strategies in inflationary periods by analyzing the performance of various portfolios in economic conditions before, during, and after inflationary periods. By analyzing historical data to a variety of 10 asset classes, this study provides insights into how investors can optimize their portfolio diversification strategies to achieve better risk-adjusted returns in these economic environments. This study demonstrates that portfolio diversification is an effective strategy for reducing risk and optimizing returns during inflationary periods. As diversification can help offset some of the losses in particular areas through gains in others, it reduces the overall impact of inflation on the portfolios. Furthermore, portfolio diversification has several other benefits such as reducing the overall risk of a portfolio, potentially improving returns, reducing unsystematic risk, and managing volatility. This study suggests that investors can apply diversification strategies to limit downturn in stocks during inflationary periods. |
