Consensus growth expectations caught up to ours and global earnings jumped — but the magnitude
of asset returns surprised us.
Not exact matches
In the spring
of 2001, to the
surprise of his colleagues, Seo left his big Wall Street firm and opened a hedge fund — which, he announced, wouldn't charge its investors the standard 2 percent
of assets and 20 percent
of returns but a lower, flat fee.
This portfolio rebalancing fits with our
asset preferences based on our outlook for global growth, even if the fast pace
of returns has
surprised.
In a really large crisis, the
return on risk
assets may look decent from ten years before to ten years after, but a lot
of people get
surprised by their need to draw on those
assets at the wrong moment — bad events come in bunches, when the credit cycle goes bust.
A potential
surprise: A rally in risk
assets prompted by investors shifting out
of cash and low - yielding
assets in search
of higher
returns.
By looking at the
asset allocation
of the portfolio, it doesn't really
surprise me why it outperformed the S&P by 18 %: 40 %
of the portfolio's
assets are invested in Treasury securities, the highest among 8 Lazy Portfolios, with three funds: VFITX (YTD
return 11.34 %), VFISX (YTD
return 6.27 %) and VIPSX (YTD
return -4.14 %).