Email I received from Ally Investing. What do you guys think? Is it time to reevaluate the 60/40 portfolio?
Posted Jun 3, 2022, 8:20 PM UTC
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Do you have a link to the actual article?
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It looks like they took relatively standard advice, but just phrased it in a click-baity way.
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Bonds and compounding interest is being pressured to come back into the game instead of sitting there ,I feel the game is not being played fairly
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Well, what points did they make? Can’t refute an argument that you never heard
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Thanks! That article was a big nothingburger. They pointed out themselves that the two asset classes have only moved together in hot inflationary periods and that this is the worst inflation in 40 years, and then wrapped it up by saying to only change strategies if you think this is how things will remain. How ridiculous. The Fed will hose down this fire and, when we are out of the resulting recession in 24ish months, anyone who broke for gold or real estate might find they lost more in the fees/higher cost of doing business than by just riding this out.
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ally doesn’t open
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OP are you retired or about to be?
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Where did this 60/40 one size for all come from? Why did she pick 1987 as the start date? $10,000 invested in 1987 would havd return $335,002 in the US Stock Market and $62,932 in the Total US Bond Market.
Time and ballz makes the register ring.
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My man you might be in the wrong subreddit.
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Three days of options every single week isn't enough? I knew some people get really into options, but I never knew some were that into options.
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2 years ago, everyone said bonds were dead because they were yielding 50 basis points and the expected return was too low. Now, people are saying bonds are dead because the expected return has increased too quickly.
My advice, ignore the noise and stay the course.
In periods of high or increasing inflation they have a very high correlation with equities meaning the 40 isn't the diversity the 60/40 portfolio pretends to be.
Sure, it provides diversity in the long run. There are periods where bonds and stocks are positively correlated, as well as some where they are negatively correlated. You don't know which it will be (in the short term) in advance. What would the better alternate be, go 100% stocks?
I think if the purpose of the 60/40 portfolio is to reduce volatility of asset returns then Ray Dalio's approach makes the most sense and picking 15-20 assets in that way. You probably could do this with ETF's - hell maybe even with bonds but you would have to be fairly choosy about which funds.
I agree, was just curious to see what others have to say.