Any thoughts on what an annual rebalance into a 10 or 20 year slow
moving bond bear market would do to a 60/40 mix?
Not exact matches
The
market's price action since late January hasn't been inspiring, and with
bond yields up, commodity prices higher and sharp price
moves among equities, it might be time to break out the
bear suit.
Imagine 2 hypothetical investors — an investor who panicked, slashed his equity allocation from 90 % to 20 % during the
bear markets in 2002 and 2008, and subsequently waited until the
market recovered before
moving his stock allocation back to a target level of 90 %; and an investor who stayed the course during the
bear markets with a 60/40 allocation of stocks and
bonds.4
Not surprisingly, index funds did a little worse than might be expected during the
bear markets, since active mangers could get defensive and
move to cash or overweight
bonds.
«If 10 - year yields are
moving north of 5.30 percent and making a new high yield for the cycle, you might argue you were in a
bear market,» said Richard Gilhooly, senior U.S.
bond strategist of BNP Paribas Securities Corp., speaking at the Reuters Investment Outlook Summit on Tuesday.