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…
Tag: Asset Allocation
How Much Can You Bear?
In last week’s edition of Sagacious, we explored the rationale for shifting away from a traditional balanced portfolio (60 percent equities, 40 percent fixed income) based on recent comments from Dr. Jeremy Siegel, a finance professor at Wharton. However, just because a portfolio may be deemed efficient, doesn’t mean that it’s necessarily right for all…
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…
Why Active and Passive Investment Are Not Mutually Exclusive
Last week, Bloomberg penned an article entitled Battered Funds Blame ETFs for Overrunning the Stock Market Again. The article (along with a subsequent Bloomberg sponsored podcast released around the same time) explores how passive investing could be blamed for the underperformance experienced by discretionary fundamental stock-picking managers. For anyone interested, the most recent SPIVA scorecard (as of…