The traditional 60/40 balanced portfolio is no stranger to coming under fire. Many pundits have decreed the death of the balanced portfolio, arguing that a low yield environment will prove insurmountable and bonds will no longer be able to provide necessary diversification for investor portfolios. This proclamation has yet to be proven correct, and in the investment management industry, being too early is the same thing as being wrong. That being said, is this time different?
Tag: 60/40 Portfolio
Death to the 60/40! Long Live the 60/40!
The traditional 60/40 balanced portfolio is no stranger to coming under fire. Many pundits have decreed the death of the balanced portfolio, arguing that a low yield environment will prove insurmountable and bonds will no longer be able to provide necessary diversification for investor portfolios. This proclamation has yet to be proven correct, and in the investment management industry, being too early is the same thing as being wrong. That being said, is this time different?
The Game Has Changed
It’s likely safe to classify 2020 as a year that has defied expectations and predictions. Led by COVID-19, the real economy and financial markets have felt the wrath of the pandemic. Since March however, there has been a disconnect between the stock market and “main street,” as the real economy continues to sputter while equity…
Is the 60/40 Portfolio Dead?
Over the last decade, there have been many proclamations that the traditional 60/40 portfolio is dead, mainly due to the fact that bonds were supposedly overvalued and yields couldn’t go any lower. This article from Ben Carlson highlights that while a 60/40 portfolio has delivered outstanding returns as a result of falling real interest rates…
The Impacts of Risk Parity Strategies
Ray Dalio’s Bridgewater is the latest celebrity investment management firm to opine that in a low-interest rate environment government bonds not only offer little in the way of value for investors, but that their ability to provide risk reduction during financial stress will be impaired as well. As this article from Bloomberg reports, Bridgewater is…
Good Old Faithful, or Just Old?
The popular 60/40 balanced portfolio (60% equities, 40% fixed income) has been a staple for many investors through their lifetimes and deservingly so. According to a recent piece by M. Batnick, 60/40 portfolios have boasted an annualized rate of return of 7.5% and positive rolling five-year returns in 99.4% of cases over the past half…