Goldman Sachs confirmed the collapse of the investment strategy based on 60% for stocks and 40% for bonds, due to the recent decline in the negative range significantly. Among the prominent proposed alternatives are investment in private stocks, real estate, infrastructure, inflation-related bonds, and stocks. That pays a dividend.
The bank pointed out that many people do not see any attraction in owning government bonds at the present time, unless some must add them to the portfolio, such as hedge funds, sovereign wealth, etc., and investors find themselves in a difficult situation with the inability to rely confidently on bonds to give them the necessary hedge. In the face of the risk of investing them in stocks, because if stocks decline, debts may not give them the expected capital gains, and stock markets seem far from providing the high returns that investors have become accustomed to in recent years, given the expected weak economic growth and low dividends, which makes the possibilities Frequent fluctuations in the market appear large.
Some investment strategists believe that there is a need for the trend to acquire alternative sources that provide stable income to occupy the position of bonds in the portfolio, but all of these alternatives are considered more risky, and some pension funds, insurance companies and others have moved to direct additional allocations for more risky options in the fixed income category, such as leveraged loans. Financial, secured loan obligations and private debt The demand for hedging strategies that use stock options has also increased recently due to concern about the repercussions of the epidemic and the US elections, in a tacit admission that the traditional portfolio based on the idea of ”60-40″ will not repeat the same historical success in what is to come, and among the proposed alternatives are private stocks and real estate. , Infrastructure, inflation-related bonds, and dividend-paying stocks. According to the bank, others are proposing less drastic adjustments that include shifting investors’ exposure to fixed income from sovereign debt to high-quality corporate bonds, although it may make the portfolio less stable because it may track stocks rather than government bonds in times of crisis.