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Want to beat the stock market over the next decade? Add bonds to your portfolio

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OPINION: The so-called 60/40 portfolio is poised to make a big comeback. It is highly likely that such an allocation — 60% stocks and 40% bonds — will outperform an all-equity index over the next decade.

The death of the 60/40 portfolio has been widely accepted as growth and technology stocks overwhelmed gains in fixed-income securities since the end of the financial meltdown over 10 years ago.

That chart is a bit cluttered. I created a composite of the three underlying measures to get a clearer relationship. The chart below combines inflation, wages and economic growth into a single composite and compares it to the 10-year Treasury rate TMUBMUSD10Y, 2.715%. If yields are correct, then investors should be heeding its warning as lower yields will translate into slower rates of earnings growth. Of course, such is problematic for valuations.

More importantly, current allocations to equities are more than two standard deviations above the norm. Per Jim: If valuations are correct, and 150 years of historic evidence hold true, there is a significant probability equity returns will fall towards zero on a “buy and hold” basis over the next decade.

By reducing volatility, and the emotional battle, investors are able to take a more logical approach in managing their portfolio over time.

 

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All you need this week is baba it’s going to roar

Not so sure about this

40 year bull market just ended

The only purpose of bonds in a portfolio is to keep you from selling your stocks in a down market otherwise if you can tolerate the loss go 100% stocks.

60% used cars 40% JPEGs of primates is the new 60 40 PF.

Opinions are like kittens. People just give them away.

Doubt it

Of course this means that bonds will outperform equities over the next decade. Possible but I wouldn't bet on it

Pretty simple. Buy $TSLA & $AAPL and you can outperform the market. 🤷‍♂️

CONGRATS ! GOODBYE ALL MY INVEST ! Please all company crash, collapse and bankrupt ! Please global crisis and inflation continue again and again ! Really I like this ! Sorry I stop all my invest ! Sorry I don't like invest again and again ! GOODBYE ALL MY INVEST !

This is a fucking joke

Crypto

What happens to this prognostication if the bond bull market is over and rates move higher due to structural inflation

Not sure who this author is, but he’s wrong.

👇🏼😱👇🏼

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