Investors doubt whether developed-market government bonds can continue providing both protection and diversification after a turbulent year, according to Bloomberg. Fears are imminent as investors face lower-for-longer rates despite growth picking up.
- Questions linger on the traditional investing policy of putting 60% of funds in stocks and 40% in bonds as the latter fell to uncharted lows.
- Analysts believe that future returns from a simple, statistic stock-bond portfolio will likely be constrained.
- Tech stocks have gained this year from stay-at-home orders, and digitization trends, overturning investors’ logic of investing in value stocks deemed sensitive to economic cycles
- 2020 reaffirmed that “cash is king,” and firms with strong balance sheets should be preferable as they preserve value during turbulent times.
- ESG-related assets outperformed during the volatility proving skeptics wrong
- Analysts believe the pandemic has brought the need for a rapid change in focus, and investors are now reassessing their long-term objectives and the outcomes required of their investments.
Global stocks are currently gaining. SPY is up 0.39%, DAX is up 1.26%, FTSE 100 is up 0.098%, U.S. 10 Treasury Yields is up 0.94%
