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: Diversified 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?
Know Thyself
The current whipsaw action of markets has resulted in a wide spectrum of forecasts ranging from a V-shaped recovery to the erosion of economies resulting in a prolonged recession. With forecasts abound, famed investor, Howard Marks, tackled this topic in his most recent memo. Mr. Marks notes one shock event is enough to throw forecasts…
Why “Resulting” is Dangerous in Both Poker and Investment Management
During times of crisis, we often read sensationalist reports about tail risk strategies that result in astronomical returns. However, these strategies aren’t meant to be a standalone solution, but rather a small part of a diversified portfolio. Tail risk hedging is a type of insurance and, as with any type of insurance, it’s important to…
Confusion Amid the Rally
Beyond COVID-19 updates, current headlines are littered with reference to underwhelming economic data, such as spiking unemployment and suffering corporate profitability. During this period, equity markets have seen one of their best stretches of historical performance, which is leaving many investors puzzled. A recent article in the L.A. Times speaks to this phenomenon and attempts…