Why the Traditional 60/40 Stock / Bond Portfolio is Broken

For almost 1/2 a century, the two asset class 60/40 stock/bond portfolio did an excellent job of providing growth, inflation protection, income and reducing risk. The two asset classes were complimentary to each other for much of this time. 

This mix might be 70/30, or it might be 50/50, all dependent on an investor’s risk profile. However, there is a major problem with this model.

The main draw to this strategy is in its simplicity. Most advisors believe that diversification of stocks and bonds is key to reducing portfolio risk and volatility. This view of diversification has seen some changes. Continue reading “Why the Traditional 60/40 Stock / Bond Portfolio is Broken”

Are You Prepared To Protect Your Wealth From The COVID-19 Pandemic Induced Financial Storm?

Real estate, stock markets, and mutual funds have seen massive increases in the last three decades. Why?

Since peaking in the early ’80s, central banks have been lowering interest rates to grow the economy and increase wealth.

Source: FactSet. Data as of 12/31/17 [1]

Over 200 years of interest rate data tell us that interest rates move in 60-year cycles. On average, 30 years up and 30 years down. These historic low-interest rates are coming to an end.

Continue reading “Are You Prepared To Protect Your Wealth From The COVID-19 Pandemic Induced Financial Storm?”