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A 60-40 Portfolio Could Return Less Than A Savings Account
FYI: Over the next decade, the traditional 60-40 portfolio will post average lower annual returns than many online bank accounts do today, according to a web tool from Newport Beach, Calif.-based Research Affiliates.
So, the author; in view of his scenario of future investment growth going into the toilet, would still expect these online "returns" will be in place???
Quote: "By comparison, annual percentage yields of 1 percent or more are available in online savings accounts from Ally and Synchrony, and online checking accounts from Aspiration."
The banks and related all have "their" spreads of profit, yes? How would they be able to continue to pay these rates when we enter "deflation"???
Anyone able to find performance data from this organization? Seems to be hidden away unless one provides a life history or opens an account.
Marketing is what I see from the article.
More coffee? Yes, I do believe I need another cup.
If you are able to sort out any of the authors jibber-jabber, please let us know. Regards, Catch
Catch, it means he doesn't know like we all don't know. But many so called "guru's" are paid a lot of money to know something. Oh well, at least we know, we don't. I guess I just said nothing that mean nothing.
Research Affiliates are Rob Arnott's group. They've been around 15 years and specialize in smart beta and asset allocation strategies; to their great credit, they've been warning that smart beta strategies (low vol, for instance) got too popular to actually generate decent returns. Arnott's argument is that only three smart beta factors, including size and value, are likely to have any enduring virtue.
About the best real-world test of their approach is PIMCO All Asset Fund (PAAIX) which is the go-anywhere fund they manage for PIMCO. Four-star, $20 billion, analyst rated as Gold, top 4% over the past decade despite a bad slump from 2013-15. By MFO's measures, since inception it has substantially higher returns, lower volatility, smaller max drawdown, quicker recovery time and better Sharpe/Sortino/Martin ratios than its Global Macro peer group.
On whole, they're responsible for about $200 billion and are well-respected though certainly not right all the time about everything.
If they're marketing anything, I'd guess it's their free asset allocation tool. It's so complex that Charles swooned in delight when he first saw it. I mostly backed quietly away.
Yes, I recall the fund you mentioned and Mr. Arnott; with the connection to Pimco. I watched this fund for a few years wondering where it was traveling to and why it held the chosen investment sectors. I don't watch anymore.
I couldn't recommend this fund or advisement from this organization; as I don't find performance of consequence. I wondered in the past where the managers have their monies invested. Regards, Catch
I have no idea if the firm will be proven right or wrong but it would obviously be more useful to know what to invest in rather than being told what won't work. I personally don't anticipate ever investing in a cd paying less than 2% but might invest in a lower paying investment with excellent liquidity.One possible approach for the next 10 years invest in a relatively high paying safe investment such as a 5 year cd with a low penalty for early closeout i.e with decent liquidity and close it out when the market drops 25% which is something that will probably occur at least once in the net 10 years.Yes, i recognise that this strategy might not work but would be pleased with other suggestions
Comments
Quote: "By comparison, annual percentage yields of 1 percent or more are available in online savings accounts from Ally and Synchrony, and online checking accounts from Aspiration."
The banks and related all have "their" spreads of profit, yes? How would they be able to continue to pay these rates when we enter "deflation"???
Anyone able to find performance data from this organization?
Seems to be hidden away unless one provides a life history or opens an account.
Marketing is what I see from the article.
More coffee? Yes, I do believe I need another cup.
If you are able to sort out any of the authors jibber-jabber, please let us know.
Regards,
Catch
In that case, whatever you said must mean something!
About the best real-world test of their approach is PIMCO All Asset Fund (PAAIX) which is the go-anywhere fund they manage for PIMCO. Four-star, $20 billion, analyst rated as Gold, top 4% over the past decade despite a bad slump from 2013-15. By MFO's measures, since inception it has substantially higher returns, lower volatility, smaller max drawdown, quicker recovery time and better Sharpe/Sortino/Martin ratios than its Global Macro peer group.
On whole, they're responsible for about $200 billion and are well-respected though certainly not right all the time about everything.
If they're marketing anything, I'd guess it's their free asset allocation tool. It's so complex that Charles swooned in delight when he first saw it. I mostly backed quietly away.
Cheers,
David
Yes, I recall the fund you mentioned and Mr. Arnott; with the connection to Pimco.
I watched this fund for a few years wondering where it was traveling to and why it held the chosen investment sectors. I don't watch anymore.
This link = composition and other choices:
https://nb.fidelity.com/public/workplacefunds/composition/OSBX?fundId=OSBX&planId=50405
This link charting PAAIX against PONDX:
http://stockcharts.com/freecharts/perf.php?PAAIX,PONDX&n=2576&O=011000
I couldn't recommend this fund or advisement from this organization; as I don't find performance of consequence.
I wondered in the past where the managers have their monies invested.
Regards,
Catch