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For the first time in over a decade, Wall Street investors who spread their bets are finally getting paid. The old “don’t put all your eggs in one basket” approach is actually working in 2025. Constant market shakeups, a brutal tariff war, and souring sentiment on US stocks have flipped everything. And the ones who always pushed diversification? They’re not laughing—but they’re not losing anymore. The shift comes as investors ditch US equities at record speed. A Treasury index has jumped nearly 3% this year. Gold is on fire. Corporate bonds are climbing. After years of getting steamrolled by large-cap stocks, all the long-ignored assets are getting their moment. Even cross-asset portfolios, which spread out risk across the map, are finally beating stocks. These ideas were buried after 2008. Now, they’re back with a vengeance. Wall Street rotates out of US stocks as diversification gains The S&P 500 barely managed to close 0.5% higher after another twitchy week, still stuck in a correction. But other strategies are crushing it. RPAR, the ETF that spreads capital across commodities, bonds, and more, has gained over 5% to start the year. That’s nearly 9 percentage points ahead of the S&P. It’s one of the clearest signs that the market rotation is real. “It feels a long time coming,” said Meb Faber, founder of Cambria Funds. “Does three months make a trend? We’ll see. But these sort of secular trends don’t necessarily last just a quarter.” Faber’s been screaming into the void for years. His global asset-allocation ETF (GAA)—which spreads across major assets—has underperformed large-cap US stocks in 14 of the last 16 years. He once called it a “bear market in diversification.” Now, GAA is finally positive, up 3% so far in 2025. It’s on track to post its best performance versus the…

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Filed under: News - @ March 22, 2025 6:26 pm