Are “traditional portfolios” dead? What are the assets for and against hedging with the worst performance?

Of assets under managementAllocate 60% to stocks and 40% to bondsThe pros and cons are divided among major institutional strategists over the traditional American investment strategy “60/40 Portfolio,” which has penetrated even individual investors. The same strategy is for both stocks aimed at capital gains and bonds aimed at risk hedgingAssumptions that there is a negative correlationHowever, due to US financial tightening, etc.Correlation has been lost due to the unusually high level of volatility in the bond market,Recently to the same portfolioCritical opinions are gaining momentumI'm wearing it.

There is strong uncertainty in the bond market
On November 10, the previous weekend, the US rating agency Moody's Investors Service saw financial soundness risks and political polarization risks in the USCredit Rating ForecastsIt was lowered from the conventional “stable (stable)” to “negative (including weakness).” The rating was maintained at the highest “AAA,” but S&P Global Ratings and Fitch RatingsThe rating has already been lowered from “superlative”Therefore, it is an unreliable situation to use as an asset for risk hedging.

Worst performance
The 60-40 portfolio has been trusted for a long time, but 2022 had the worst performance since 2008.The Bloomberg Index, which shows results for the 60-40 portfolio, fell by about 17% last year. Will there be turmoil in the US bond market again this yearSpurred by simultaneous sales of stocks and bondsI'm playing it.

hedging with gold?
Both Catherine Doyle, a real return strategy investment expert at Newton Investment Management, and Pim van Fleet, Robeco's chief quants strategistLow volatility gold is useful for defensive portfoliosIt shows the point of view that. The strategists in BlackRock's research department said in a report this spring”We recommend “dismantling traditional asset allocations”Also, it was decided that allocation to inflation-linked bonds and short-term bonds was desirable in terms of yield, etc.

Is it a better return than cash
Meanwhile, JP MorganThe 60-40 portfolio is not dead, and it will surpass cash asset records by 4.1 points per year over the next 10 yearsThe probable calculation is shown. This is because interest rates on cash assets are expected to peak. The company says that by supplementing alternative investments such as private equity (PE, unlisted shares), real estate, and commercial mortgages by 25% in addition to traditional asset structures, investors can further boost returns by 0.6 points per year while suppressing risk over the next 10 years.