The head of investment research at the world's largest hedge fund says most portfolios are too concentrated in stocks | Markets Insider

Bridgewater's Karen Karniol-Tambour told Bloomberg on Thursday that the"new era" of economic policy is the coordination of monetary and fiscal policy.

She added that this new era of policies requires a diversified portfolio in case of inflation – most portfolios are too concentrated in stocks and should add in gold or inflation-linked bonds.Karen Karniol-Tambour told Bloomberg on Thursday that"as the world changes, investing needs to change with it," and broke down a macro-economic signal that could justify why investors too concentrated in equities should diversify.

While central banks and the ECB have said for a long time that they need this fiscal coordination, the coordination hasn't happened in large part, around the world, until the pandemic, said Karniol-Tambour. The COVID-19 crisis was when"it became more clear and obvious that without fiscal stimulation we simply will not get out of the current downturn.

For example, the new levels of coordination between fiscal and monetary policy have left over a lot of money to go into the stock market, she explained. But, she said"most portfolios are already too concentrated in equities, so where a lot of our research has been is what are the most important assets to diversify equities in this environment of fiscal and monetary coordination?"

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