Very well written article Richard. A lot of things make sense based on your analysis, especially in the Covid times. So, the question is, if the 60/40 portfolio is dead, what kind of portfolio does a regular investor invest in?
I wish I had a simple answer for you Ashok but I don't. Part of my point is that we have been relying on overly simplistic answers for way too long now. That reliance on over-simplification has led us to the mess we're in right now where the only question is whether or not the Fed can hold things together. The famous Yeats poem comes to mind, "Things fall apart; the centre cannot hold."
We have been experiencing what I might call "engineered wealth" for so long now that we have forgotten what real wealth even is. We have to start to think and reflect more deeply upon what wealth really is. It isn't a secret algorithm, that's for sure.
Once we start to get a sense of what it might be, we can start our "slouch towards Bethlehem" and rebuild.
In the interim, it's all about preservation of capital and not doing stupid.
Great summary Richard. I think the 60/40 portfolio is way too simplistic and risky for the average retail investor and will continue to suffer for a while with stagflation.
Thanks Tom! Couldn't agree more. What are your ideas on how retail investors can get past the over-simplification that we are always pitched by the slick salesman?
Take more responsibility for their assets and learn something about trading, risk mitigation and the mental side of investing. Many attempt to understand more about their health and how to improve it. But, with their financial well-being, investors will say “that’s too complicated” or “I don’t have the time” or “I have Joe manage my account”. TAKE RESPONSIBILITY FOR YOUR NET WEALTH! I am not saying you have to be an expert, but is it too much to ask a few questions, listen to a podcast while doing chores or reading a book or two? If you have your entire financial future tied into whatever the markets end up doing and take no responsibility to attack risk, then risk comes along sooner or later and pays you a visit. When that happens, it may get ugly.
Very well written article Richard. A lot of things make sense based on your analysis, especially in the Covid times. So, the question is, if the 60/40 portfolio is dead, what kind of portfolio does a regular investor invest in?
I wish I had a simple answer for you Ashok but I don't. Part of my point is that we have been relying on overly simplistic answers for way too long now. That reliance on over-simplification has led us to the mess we're in right now where the only question is whether or not the Fed can hold things together. The famous Yeats poem comes to mind, "Things fall apart; the centre cannot hold."
We have been experiencing what I might call "engineered wealth" for so long now that we have forgotten what real wealth even is. We have to start to think and reflect more deeply upon what wealth really is. It isn't a secret algorithm, that's for sure.
Once we start to get a sense of what it might be, we can start our "slouch towards Bethlehem" and rebuild.
In the interim, it's all about preservation of capital and not doing stupid.
Great summary Richard. I think the 60/40 portfolio is way too simplistic and risky for the average retail investor and will continue to suffer for a while with stagflation.
Thanks Tom! Couldn't agree more. What are your ideas on how retail investors can get past the over-simplification that we are always pitched by the slick salesman?
Take more responsibility for their assets and learn something about trading, risk mitigation and the mental side of investing. Many attempt to understand more about their health and how to improve it. But, with their financial well-being, investors will say “that’s too complicated” or “I don’t have the time” or “I have Joe manage my account”. TAKE RESPONSIBILITY FOR YOUR NET WEALTH! I am not saying you have to be an expert, but is it too much to ask a few questions, listen to a podcast while doing chores or reading a book or two? If you have your entire financial future tied into whatever the markets end up doing and take no responsibility to attack risk, then risk comes along sooner or later and pays you a visit. When that happens, it may get ugly.