Latest News

The standard 60/40 investment portfolio is dead: deVere CEO

April 14, 2022 (Investorideas.com Newswire) The time-honoured 60/40 investment portfolio is not fit for purpose in today’s sky-high inflation environment, warns the CEO and founder of one of the world’s largest financial advisory, asset management and fintech organisations.

The stark warning from Nigel Green of deVere Group comes as UK inflation hits a 30-year high of 7%, U.S. inflation accelerates to 8.5% hitting a four-decade high, and Eurozone inflation soars to a record 7.5%, more than triple the ECB target.

He comments: “Around the world, inflation is sky high and it’s getting worse. It appears to be anything but aEUR~transitory,’ as many had been hoping even a couple of months ago.

“As it erodes the purchasing power of money, outstripping inflation is most investors’ primary goal.

“For about half a century, investors have been able to create, grow and protect their wealth using the 60/40 portfolio model. 60% stocks and 40% bonds were enough to hit both goals of capital appreciation and capital preservation.

“This is no longer the case.”

He continues: “Stock market valuations remain near historical, all-time highs, which is particularly of concern as the cost of capital is no longer free.

“Meanwhile, bonds, a major part of most portfolios for decades, offer neither yield nor an inflation hedge. Nowadays they don’t rally as they used to when stocks sell-off due to the low yields.

“Therefore, in this environment, the 60/40 investment portfolio model is dead; it is no longer fit for purpose.”

In order to achieve long-term portfolio growth, says Nigel Green, investors should keep some of their wealth in cash for everyday spending requirements, and a rainy day or emergency fund, and also consider increasing their exposure to significantly more diverse, and perhaps more volatile, investment opportunities.

A good fund manager will help investors seek out the opportunities and mitigate potential risks as and when they are presented to generate and build their wealth.

He concludes: “With valuations near all-time highs and yields at all-time lows, the time-honoured 60/40 portfolio is unlikely to outpace inflation nor offer considerable downside protection.

“Investors should review their portfolios sooner rather than later to ensure they remain on track to reach their long-term financial goals.”

Twitter: @PriorConsults

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients. It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.

More Info:

This news is published on the Investorideas.com Newswire – a global digital news source for investors and business leaders

Disclaimer/Disclosure: Investorideas.com is a digital publisher of third party sourced news, articles and equity research as well as creates original content, including video, interviews and articles. Original content created by investorideas is protected by copyright laws other than syndication rights. Our site does not make recommendations for purchases or sale of stocks, services or products. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. All investing involves risk and possible losses. This site is currently compensated for news publication and distribution, social media and marketing, content creation and more. Disclosure is posted for each compensated news release, content published /created if required but otherwise the news was not compensated for and was published for the sole interest of our readers and followers. Contact management and IR of each company directly regarding specific questions.

More disclaimer info: https://www.investorideas.com/About/Disclaimer.asp Learn more about publishing your news release and our other news services on the Investorideas.com newswire https://www.investorideas.com/News-Upload/ and tickertagstocknews.com

Global investors must adhere to regulations of each country. Please read Investorideas.com privacy policy: https://www.investorideas.com/About/Private_Policy.asp

What's your reaction?

Excited
0
Happy
0
In Love
0
Not Sure
0
Silly
0

You may also like

Leave a reply

Your email address will not be published.

More in:Latest News