Can the 60/40 Portfolio Redeem Itself?
The 60/40 portfolio delivered its worst annual performance since the global financial crisis in 2022.
Investors are challenged to mitigate the impact of a variety of risks. In today’s uncertain market, elevated levels of inflation and the possibility of a global economic downturn remain two prominent risks for investors to consider. What about risks that are harder to identify? Recent events such as the pandemic and the war in Ukraine altered the investment outlook in significant ways, turning a spotlight on the potential for new tail risks that may be on the horizon.
In the latest episode of The OUTThinking Investor, PGIM Wadhwani CIO Sushil Wadhwani is joined by author Kevin Coldiron and Columbia Business School professor Laura Veldkamp to discuss recent liquidity crises, portfolio strategies for managing tail risks, and why tighter monetary policies could expose cracks in the financial system.
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The 60/40 portfolio delivered its worst annual performance since the global financial crisis in 2022.
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The big question facing the US economy heading into the new year is whether it will formally enter a recession amid elevated inflation and higher rates.