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Investors' stock picking attempts overrun by China

Investors look at screens showing stock market prices at a securities company in Beijing.
Fred Dufour | AFP | Getty Images
Investors look at screens showing stock market prices at a securities company in Beijing.

Turmoil in China is causing a risk-off trade to sweep the globe, causing countries' benchmark indexes to be increasingly correlated to one another and making it harder for bottoms-up investors to beat the market.

"It's not the best environment for stock picking," said Aaron Clark, portfolio manager at GW&K Investment Management, which has $25 billion in assets under management.

"When correlations rise, it becomes much more macro risk-on, risk-off environment, which we have been in for the better part of the post-financial crisis," he said.

Here's what to do about it.

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