There's a classic saying in finance of that sort, hinting at the very loosely observed phenomena that when shit really hits the fan, everything moves in the same, downward, direction. (In a crisis, all correlations go to 1.)
This Buttonwood column in The Economist from the last issue was actually really good on this.
(The Stackers, and me too for that matter, often snicker at The Economist's often ridiculous or altogether idiotic takes; but look hard enough and in every issue you find a handful of actually good pieces of economic journalism.)
This one explains how diversification used to be an awesome trick; you could reduce the volatility in your portfolio and get the same returns (or same vol with higher return) by holding a lot of assets and asset classes that were unaffected by events that affected other components in their portfolio.
Here's the idea:
Building [a portfolio] that is actually diversified, in the sense that its components offset each other’s risk, has become much harder. Diversification gets its magic from the fact that the prices of different assets do not all move together. The market values of a gold mine in Kazakhstan and a recruitment firm in San Francisco, for instance, will fluctuate for very different reasons even if they both have similar returns"
So:
Hold lots of uncorrelated assets and you get this effect writ large: a portfolio with a return that is the average of its constituents’ but with a lower volatility. The less correlated the assets’ returns, the greater the magic. When few investors could manage the trick [of diversification], it was a stellar idea. Once it was popular and available to the mass market, its dynamics were distorted and the benefits started to fade. A similar fate befell the Buffettian strategy of buying undervalued “cigar-butt” stocks, after automated screening made them easy to identify and hence vanishingly rare.
In the 1970s, before the re-globalisation of finance gathered pace, the average correlation between pairs of share indices for developed markets was 0.37. By 2021 it was 0.75. For pairs of emerging-market indices the average correlation rose from 0.05 to 0.49.
...ok, already has been breaking.
The columnists maintains that "There is still some benefit to spreading your portfolio across different regions and asset classes."
Rings hollow:
All assets are now just one and the same money/liquidity trade.
The end of not just value investing (#836811) but all investing is near.
non-paywalled here https://archive.md/GssgG
AAPL=AAPL/USD) or a derivative of that and fiat gains is the common denominator for success by the majority of investors.