THE RETURN OF MIXED RESULTS

A month ago, we surveyed the latest numbers for the major asset classes and wondered how long everything could continue rising. A month later, we have our answer. As our table below shows, divergence has returned to the world's capital and commodity markets.

The switch to a wider array of results was inevitable. As we've been discussing for some time, the great snap-back period of 2009 was destined to be a temporary fling. When it became clear earlier this year that the world would not end, assets were repriced accordingly. But the first hint that something other than uniformity will prevail in performance trends arrived in October's tally of asset class results.

From the leading gain in commodities last month to the bottom performance in REITs, the markets have returned to something approximating normality in terms of return distributions on a monthly basis. Rest assured, the leaders and laggards will evolve, but the odds look higher now for a divergence in returns in any given month.

As a result, the case for owning and managing a multi-asset class portfolio is stronger. Much of what's unfolded over the past year suggests otherwise, of course. The crash of late-2008 slashed prices in most asset classes, which was followed by a sharp rally in the same this year since March. But the high-correlation roller coaster in everything may be over. If so, nuance and subtlety are returning to the business of designing portfolio strategy. That's no surprise given the outlook for the global economy, which reflects a diverging mix of expectations.

The all-or-nothing trade is over. In fact, that constitutes progress. But you'll have to work harder in the months and years ahead to beat the market portfolio. In fact, that's the norm, the last 12 months being the supreme exception of modern times.

The shift back to a standard profile of return, correlation, volatility and other metrics among the major asset classes has only just begun. But this trend has legs and strategic-minded investors should take note.