The dominant theme in the financial economics literature is that most relationships are dynamic. Everything from asset valuations to correlation and volatility fluctuate through time. This empirical fact applies within and across asset classes. Change, in other words, is a constant and it is the primary source of risk and opportunity. But there’s always an exception to the rule. Perhaps the leading example in finance is the persistence of average results by a representative index for an asset class or an asset allocation strategy.

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