Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says

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Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says

MarketWatch2022-03-19

‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station ...

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Comment（74）

不怕死
·2022-03-21
Ok
Reply
2
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PearlynCSY
·2022-03-21
Inflation has become one of 2022's biggest economic stories globally. Already, many of us are feeling the pinch from rising prices and falling income, especially those in sectors yet to recover from Covid-19's impact. The spectre of a prolonged inflation and protracted war in Ukraine set the stage for a perfect storm threatening to blow the world economy off course. Policymakers and economists, are increasingly warning that the global economy could go into a rare economic situation known as stagflation, which last occurred in the 1970s. In such a situation, where a stagnant economy meets high inflation, policymakers are often caught in a bind because the tools they use to counter one of the two ills usually ends up making the other worse.
Reply
3
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hiryan
·2022-03-21
Lost
Reply
1
Report
CWen
·2022-03-21
good
Reply
1
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Jojoojojcccc
·2022-03-21
Like
Reply
3
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koolgal
·2022-03-20
Stagflation is a much dreaded word for Central governments but recession is worse. Inflation can change to Stagflation is not controlled properly. That's why the Feds are raising interest rates. 🤔
Reply
25
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q14n
·2022-03-20
Nice
Reply
3
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MHh
·2022-03-20
I see CPF as the bond equivalent of one's portfolio haha...
Reply
8
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Bodoh
·2022-03-20
Move to 80/20 or 50/50?
Reply
5
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MFME
·2022-03-20
What else...
Reply
6
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MINH
·2022-03-20
Yes
Reply
6
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11504348
·2022-03-20
Don't discount the huge infrastructure investment being planned across the US, and expect European countries to follow suit as well. Add in the military spending by European governments and I reckon we'll see some strong growth yet.
Reply
7
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ccwee
·2022-03-20
read
Reply
4
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claratan
·2022-03-20
Wow
Reply
3
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DirtyGreen
·2022-03-20
Wow
Reply
6
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ZenInv
·2022-03-20
Yes agree stagflation will be a huge dent in the economy. Yet I believe there are stocks that will outperform by 5-10x even in such unfavorable environment.
Reply
6
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Chloeyeo
·2022-03-20
Please comment and like
Reply
5
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CubTrader
·2022-03-20
Then what will be a good portfolio?
Reply
8
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HH浩
·2022-03-20
Lost decade like Japan?
Reply
7
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Pluto891
·2022-03-20
allocation is still a good way to diversify. just arrange the number. But if 60/40 were past trends... probably still good to follow. sometimes , dun read too much. [Happy]
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Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.Datastream, Haver Analytics, Goldman Sachs Global Investment Research“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.Datastream, Haver Analytics, Goldman Sachs Global Investment ResearchA combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase & Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.","kind":null,"is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":9034347633,"gmtCreate":1647820111924,"gmtModify":1676534267738,"author":{"id":"4091242839202020","authorId":"4091242839202020","name":"不怕死","avatar":"https://static.itradeup.com/news/ac91e7b85fb242bc024fdf8db31ba30f","vip":1,"crmLevel":1,"crmLevelSwitch":0,"idStr":"4091242839202020","authorIdStr":"4091242839202020"},"htmlText":"Ok","listText":"Ok","text":"Ok","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9034347633","repostId":2220772443,"repostType":4,"repost":{"id":"2220772443","pubTimestamp":1647668140,"share":"https://ttm.financial/m/news/2220772443?lang=&edition=fundamental","pubTime":"2022-03-19 13:35","market":"us","language":"en","title":"Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says","url":"https://stock-news.laohu8.com/highlight/detail?id=2220772443","media":"MarketWatch","summary":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Si","content":"<html><head></head><body><p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic Strategy</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/e6b6710679b3aae2d6e541f6cc271d9a\" tg-width=\"700\" tg-height=\"466\" referrerpolicy=\"no-referrer\"/><span>Motorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.</span></p><p>Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.</p><p>Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.</p><p>Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.</p><p>Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/8d9f2a175dd3688f27a4dc2f91b128cc\" tg-width=\"700\" tg-height=\"434\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”</p><p>“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”</p><p>The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.</p><p>The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.</p><p>But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.</p><p>The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/a7e753dbfc786ce88d4949a0efd9828b\" tg-width=\"700\" tg-height=\"367\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>A combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.</p><p>To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase &amp; Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”</p><p>“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”</p><p>On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.</p></body></html>","source":"lsy1603348471595","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nStagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-03-19 13:35 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page><strong>MarketWatch</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station ...</p>\n\n<a href=\"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".DJI":"道琼斯",".IXIC":"NASDAQ Composite",".SPX":"S&P 500 Index"},"source_url":"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2220772443","content_text":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.Datastream, Haver Analytics, Goldman Sachs Global Investment Research“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.Datastream, Haver Analytics, Goldman Sachs Global Investment ResearchA combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase & Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9034327766,"gmtCreate":1647818139773,"gmtModify":1676534267246,"author":{"id":"4092458811577680","authorId":"4092458811577680","name":"PearlynCSY","avatar":"https://static.tigerbbs.com/b3e9fe7af061efe80a756d23de62e7b3","vip":1,"crmLevel":4,"crmLevelSwitch":1,"idStr":"4092458811577680","authorIdStr":"4092458811577680"},"htmlText":"Inflation has become one of 2022's biggest economic stories globally. Already, many of us&nbsp;are feeling the pinch from rising prices and falling income, especially those in sectors yet to recover from Covid-19's impact. The spectre of a prolonged inflation and protracted war in Ukraine set the stage for a perfect storm threatening to blow the world economy off course. Policymakers and economists, are increasingly warning that the global economy could go into a rare economic situation known as stagflation, which last occurred in the 1970s. In such a situation, where a stagnant economy meets high inflation, policymakers are often caught in a bind because the tools they use to counter one of the two ills usually ends up making the other worse.","listText":"Inflation has become one of 2022's biggest economic stories globally. Already, many of us&nbsp;are feeling the pinch from rising prices and falling income, especially those in sectors yet to recover from Covid-19's impact. The spectre of a prolonged inflation and protracted war in Ukraine set the stage for a perfect storm threatening to blow the world economy off course. Policymakers and economists, are increasingly warning that the global economy could go into a rare economic situation known as stagflation, which last occurred in the 1970s. In such a situation, where a stagnant economy meets high inflation, policymakers are often caught in a bind because the tools they use to counter one of the two ills usually ends up making the other worse.","text":"Inflation has become one of 2022's biggest economic stories globally. Already, many of us are feeling the pinch from rising prices and falling income, especially those in sectors yet to recover from Covid-19's impact. The spectre of a prolonged inflation and protracted war in Ukraine set the stage for a perfect storm threatening to blow the world economy off course. Policymakers and economists, are increasingly warning that the global economy could go into a rare economic situation known as stagflation, which last occurred in the 1970s. In such a situation, where a stagnant economy meets high inflation, policymakers are often caught in a bind because the tools they use to counter one of the two ills usually ends up making the other worse.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9034327766","repostId":2220772443,"repostType":4,"repost":{"id":"2220772443","pubTimestamp":1647668140,"share":"https://ttm.financial/m/news/2220772443?lang=&edition=fundamental","pubTime":"2022-03-19 13:35","market":"us","language":"en","title":"Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says","url":"https://stock-news.laohu8.com/highlight/detail?id=2220772443","media":"MarketWatch","summary":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Si","content":"<html><head></head><body><p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic Strategy</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/e6b6710679b3aae2d6e541f6cc271d9a\" tg-width=\"700\" tg-height=\"466\" referrerpolicy=\"no-referrer\"/><span>Motorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.</span></p><p>Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.</p><p>Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.</p><p>Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.</p><p>Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/8d9f2a175dd3688f27a4dc2f91b128cc\" tg-width=\"700\" tg-height=\"434\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”</p><p>“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”</p><p>The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.</p><p>The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.</p><p>But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.</p><p>The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/a7e753dbfc786ce88d4949a0efd9828b\" tg-width=\"700\" tg-height=\"367\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>A combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.</p><p>To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase &amp; Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”</p><p>“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”</p><p>On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.</p></body></html>","source":"lsy1603348471595","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nStagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-03-19 13:35 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page><strong>MarketWatch</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station ...</p>\n\n<a href=\"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".DJI":"道琼斯",".IXIC":"NASDAQ Composite",".SPX":"S&P 500 Index"},"source_url":"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2220772443","content_text":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.Datastream, Haver Analytics, Goldman Sachs Global Investment Research“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.Datastream, Haver Analytics, Goldman Sachs Global Investment ResearchA combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase & Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9034327077,"gmtCreate":1647818049580,"gmtModify":1676534267207,"author":{"id":"3566188406021924","authorId":"3566188406021924","name":"hiryan","avatar":"https://static.tigerbbs.com/b6d871adf76ee05a7b420452b564855f","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3566188406021924","authorIdStr":"3566188406021924"},"htmlText":"Lost","listText":"Lost","text":"Lost","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9034327077","repostId":2220772443,"repostType":4,"repost":{"id":"2220772443","pubTimestamp":1647668140,"share":"https://ttm.financial/m/news/2220772443?lang=&edition=fundamental","pubTime":"2022-03-19 13:35","market":"us","language":"en","title":"Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says","url":"https://stock-news.laohu8.com/highlight/detail?id=2220772443","media":"MarketWatch","summary":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Si","content":"<html><head></head><body><p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic Strategy</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/e6b6710679b3aae2d6e541f6cc271d9a\" tg-width=\"700\" tg-height=\"466\" referrerpolicy=\"no-referrer\"/><span>Motorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.</span></p><p>Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.</p><p>Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.</p><p>Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.</p><p>Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/8d9f2a175dd3688f27a4dc2f91b128cc\" tg-width=\"700\" tg-height=\"434\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”</p><p>“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”</p><p>The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.</p><p>The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.</p><p>But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.</p><p>The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/a7e753dbfc786ce88d4949a0efd9828b\" tg-width=\"700\" tg-height=\"367\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>A combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.</p><p>To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase &amp; Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”</p><p>“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”</p><p>On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.</p></body></html>","source":"lsy1603348471595","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nStagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-03-19 13:35 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page><strong>MarketWatch</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station ...</p>\n\n<a href=\"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".DJI":"道琼斯",".IXIC":"NASDAQ Composite",".SPX":"S&P 500 Index"},"source_url":"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2220772443","content_text":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.Datastream, Haver Analytics, Goldman Sachs Global Investment Research“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.Datastream, Haver Analytics, Goldman Sachs Global Investment ResearchA combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase & Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9034328318,"gmtCreate":1647817452212,"gmtModify":1676534267116,"author":{"id":"3581818742728168","authorId":"3581818742728168","name":"CWen","avatar":"https://static.tigerbbs.com/31b0269cbebdce24b628856129a8ab15","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3581818742728168","authorIdStr":"3581818742728168"},"htmlText":"good","listText":"good","text":"good","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9034328318","repostId":2220772443,"repostType":4,"repost":{"id":"2220772443","pubTimestamp":1647668140,"share":"https://ttm.financial/m/news/2220772443?lang=&edition=fundamental","pubTime":"2022-03-19 13:35","market":"us","language":"en","title":"Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says","url":"https://stock-news.laohu8.com/highlight/detail?id=2220772443","media":"MarketWatch","summary":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Si","content":"<html><head></head><body><p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic Strategy</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/e6b6710679b3aae2d6e541f6cc271d9a\" tg-width=\"700\" tg-height=\"466\" referrerpolicy=\"no-referrer\"/><span>Motorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.</span></p><p>Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.</p><p>Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.</p><p>Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.</p><p>Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/8d9f2a175dd3688f27a4dc2f91b128cc\" tg-width=\"700\" tg-height=\"434\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”</p><p>“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”</p><p>The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.</p><p>The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.</p><p>But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.</p><p>The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/a7e753dbfc786ce88d4949a0efd9828b\" tg-width=\"700\" tg-height=\"367\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>A combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.</p><p>To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase &amp; Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”</p><p>“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”</p><p>On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.</p></body></html>","source":"lsy1603348471595","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nStagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-03-19 13:35 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page><strong>MarketWatch</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station ...</p>\n\n<a href=\"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".DJI":"道琼斯",".IXIC":"NASDAQ Composite",".SPX":"S&P 500 Index"},"source_url":"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2220772443","content_text":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.Datastream, Haver Analytics, Goldman Sachs Global Investment Research“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.Datastream, Haver Analytics, Goldman Sachs Global Investment ResearchA combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase & Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9034310840,"gmtCreate":1647792979956,"gmtModify":1676534266151,"author":{"id":"4107330566917750","authorId":"4107330566917750","name":"Jojoojojcccc","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":1,"crmLevelSwitch":0,"idStr":"4107330566917750","authorIdStr":"4107330566917750"},"htmlText":"Like","listText":"Like","text":"Like","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9034310840","repostId":2220772443,"repostType":4,"repost":{"id":"2220772443","pubTimestamp":1647668140,"share":"https://ttm.financial/m/news/2220772443?lang=&edition=fundamental","pubTime":"2022-03-19 13:35","market":"us","language":"en","title":"Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says","url":"https://stock-news.laohu8.com/highlight/detail?id=2220772443","media":"MarketWatch","summary":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Si","content":"<html><head></head><body><p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic Strategy</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/e6b6710679b3aae2d6e541f6cc271d9a\" tg-width=\"700\" tg-height=\"466\" referrerpolicy=\"no-referrer\"/><span>Motorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.</span></p><p>Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.</p><p>Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.</p><p>Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.</p><p>Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/8d9f2a175dd3688f27a4dc2f91b128cc\" tg-width=\"700\" tg-height=\"434\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”</p><p>“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”</p><p>The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.</p><p>The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.</p><p>But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.</p><p>The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/a7e753dbfc786ce88d4949a0efd9828b\" tg-width=\"700\" tg-height=\"367\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>A combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.</p><p>To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase &amp; Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”</p><p>“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”</p><p>On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.</p></body></html>","source":"lsy1603348471595","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nStagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-03-19 13:35 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page><strong>MarketWatch</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station ...</p>\n\n<a href=\"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".DJI":"道琼斯",".IXIC":"NASDAQ Composite",".SPX":"S&P 500 Index"},"source_url":"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2220772443","content_text":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.Datastream, Haver Analytics, Goldman Sachs Global Investment Research“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.Datastream, Haver Analytics, Goldman Sachs Global Investment ResearchA combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase & Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9034951919,"gmtCreate":1647767752491,"gmtModify":1676534264525,"author":{"id":"3559581955535845","authorId":"3559581955535845","name":"koolgal","avatar":"https://static.tigerbbs.com/c05274d88ffc0434623e57350c52c70a","vip":2,"hat":"https://static.tigerbbs.com/0a8758340a08196056f8bc1e54805193","crmLevel":6,"crmLevelSwitch":1,"idStr":"3559581955535845","authorIdStr":"3559581955535845"},"htmlText":"Stagflation is a much dreaded word for Central governments but recession is worse.&nbsp; Inflation can change to Stagflation is not controlled properly.&nbsp; That's why the Feds are raising interest rates.&nbsp; 🤔","listText":"Stagflation is a much dreaded word for Central governments but recession is worse.&nbsp; Inflation can change to Stagflation is not controlled properly.&nbsp; That's why the Feds are raising interest rates.&nbsp; 🤔","text":"Stagflation is a much dreaded word for Central governments but recession is worse. Inflation can change to Stagflation is not controlled properly. That's why the Feds are raising interest rates. 🤔","images":[],"top":1,"highlighted":2,"essential":1,"paper":1,"likeSize":25,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9034951919","repostId":2220772443,"repostType":4,"repost":{"id":"2220772443","pubTimestamp":1647668140,"share":"https://ttm.financial/m/news/2220772443?lang=&edition=fundamental","pubTime":"2022-03-19 13:35","market":"us","language":"en","title":"Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says","url":"https://stock-news.laohu8.com/highlight/detail?id=2220772443","media":"MarketWatch","summary":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Si","content":"<html><head></head><body><p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic Strategy</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/e6b6710679b3aae2d6e541f6cc271d9a\" tg-width=\"700\" tg-height=\"466\" referrerpolicy=\"no-referrer\"/><span>Motorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.</span></p><p>Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.</p><p>Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.</p><p>Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.</p><p>Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/8d9f2a175dd3688f27a4dc2f91b128cc\" tg-width=\"700\" tg-height=\"434\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”</p><p>“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”</p><p>The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.</p><p>The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.</p><p>But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.</p><p>The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/a7e753dbfc786ce88d4949a0efd9828b\" tg-width=\"700\" tg-height=\"367\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>A combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.</p><p>To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase &amp; Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”</p><p>“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”</p><p>On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.</p></body></html>","source":"lsy1603348471595","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nStagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-03-19 13:35 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page><strong>MarketWatch</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station ...</p>\n\n<a href=\"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".DJI":"道琼斯",".IXIC":"NASDAQ Composite",".SPX":"S&P 500 Index"},"source_url":"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2220772443","content_text":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.Datastream, Haver Analytics, Goldman Sachs Global Investment Research“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.Datastream, Haver Analytics, Goldman Sachs Global Investment ResearchA combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase & Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9034989913,"gmtCreate":1647754367503,"gmtModify":1676534263586,"author":{"id":"3581245996241049","authorId":"3581245996241049","name":"q14n","avatar":"https://static.tigerbbs.com/9026569979a298d00d3912fffdcb270e","vip":1,"crmLevel":3,"crmLevelSwitch":0,"idStr":"3581245996241049","authorIdStr":"3581245996241049"},"htmlText":"Nice","listText":"Nice","text":"Nice","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9034989913","repostId":2220772443,"repostType":4,"repost":{"id":"2220772443","pubTimestamp":1647668140,"share":"https://ttm.financial/m/news/2220772443?lang=&edition=fundamental","pubTime":"2022-03-19 13:35","market":"us","language":"en","title":"Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says","url":"https://stock-news.laohu8.com/highlight/detail?id=2220772443","media":"MarketWatch","summary":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Si","content":"<html><head></head><body><p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic Strategy</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/e6b6710679b3aae2d6e541f6cc271d9a\" tg-width=\"700\" tg-height=\"466\" referrerpolicy=\"no-referrer\"/><span>Motorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.</span></p><p>Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.</p><p>Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.</p><p>Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.</p><p>Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/8d9f2a175dd3688f27a4dc2f91b128cc\" tg-width=\"700\" tg-height=\"434\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”</p><p>“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”</p><p>The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.</p><p>The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.</p><p>But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.</p><p>The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/a7e753dbfc786ce88d4949a0efd9828b\" tg-width=\"700\" tg-height=\"367\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>A combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.</p><p>To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase &amp; Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”</p><p>“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”</p><p>On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.</p></body></html>","source":"lsy1603348471595","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nStagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-03-19 13:35 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page><strong>MarketWatch</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station ...</p>\n\n<a href=\"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".DJI":"道琼斯",".IXIC":"NASDAQ Composite",".SPX":"S&P 500 Index"},"source_url":"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2220772443","content_text":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.Datastream, Haver Analytics, Goldman Sachs Global Investment Research“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.Datastream, Haver Analytics, Goldman Sachs Global Investment ResearchA combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase & Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9034077646,"gmtCreate":1647744046044,"gmtModify":1676534262417,"author":{"id":"4091758936365950","authorId":"4091758936365950","name":"MHh","avatar":"https://static.tigerbbs.com/54b2feced9ef5dcc9e95997d1f4db280","vip":1,"crmLevel":7,"crmLevelSwitch":1,"idStr":"4091758936365950","authorIdStr":"4091758936365950"},"htmlText":"I see CPF as the bond equivalent of one's portfolio haha...","listText":"I see CPF as the bond equivalent of one's portfolio haha...","text":"I see CPF as the bond equivalent of one's portfolio haha...","images":[],"top":1,"highlighted":2,"essential":1,"paper":1,"likeSize":8,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9034077646","repostId":2220772443,"repostType":4,"repost":{"id":"2220772443","pubTimestamp":1647668140,"share":"https://ttm.financial/m/news/2220772443?lang=&edition=fundamental","pubTime":"2022-03-19 13:35","market":"us","language":"en","title":"Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says","url":"https://stock-news.laohu8.com/highlight/detail?id=2220772443","media":"MarketWatch","summary":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Si","content":"<html><head></head><body><p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic Strategy</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/e6b6710679b3aae2d6e541f6cc271d9a\" tg-width=\"700\" tg-height=\"466\" referrerpolicy=\"no-referrer\"/><span>Motorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.</span></p><p>Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.</p><p>Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.</p><p>Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.</p><p>Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/8d9f2a175dd3688f27a4dc2f91b128cc\" tg-width=\"700\" tg-height=\"434\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”</p><p>“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”</p><p>The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.</p><p>The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.</p><p>But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.</p><p>The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/a7e753dbfc786ce88d4949a0efd9828b\" tg-width=\"700\" tg-height=\"367\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>A combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.</p><p>To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase &amp; Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”</p><p>“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”</p><p>On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.</p></body></html>","source":"lsy1603348471595","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nStagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-03-19 13:35 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page><strong>MarketWatch</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station ...</p>\n\n<a href=\"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".DJI":"道琼斯",".IXIC":"NASDAQ Composite",".SPX":"S&P 500 Index"},"source_url":"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2220772443","content_text":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.Datastream, Haver Analytics, Goldman Sachs Global Investment Research“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.Datastream, Haver Analytics, Goldman Sachs Global Investment ResearchA combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase & Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9034078864,"gmtCreate":1647743026860,"gmtModify":1676534262301,"author":{"id":"3559859558754319","authorId":"3559859558754319","name":"Bodoh","avatar":"https://static.tigerbbs.com/349218ea2852130ca86ce660b4aa2d59","vip":1,"crmLevel":3,"crmLevelSwitch":0,"idStr":"3559859558754319","authorIdStr":"3559859558754319"},"htmlText":"Move to 80/20 or 50/50?","listText":"Move to 80/20 or 50/50?","text":"Move to 80/20 or 50/50?","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":5,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9034078864","repostId":2220772443,"repostType":4,"repost":{"id":"2220772443","pubTimestamp":1647668140,"share":"https://ttm.financial/m/news/2220772443?lang=&edition=fundamental","pubTime":"2022-03-19 13:35","market":"us","language":"en","title":"Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says","url":"https://stock-news.laohu8.com/highlight/detail?id=2220772443","media":"MarketWatch","summary":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Si","content":"<html><head></head><body><p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic Strategy</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/e6b6710679b3aae2d6e541f6cc271d9a\" tg-width=\"700\" tg-height=\"466\" referrerpolicy=\"no-referrer\"/><span>Motorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.</span></p><p>Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.</p><p>Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.</p><p>Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.</p><p>Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/8d9f2a175dd3688f27a4dc2f91b128cc\" tg-width=\"700\" tg-height=\"434\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”</p><p>“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”</p><p>The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.</p><p>The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.</p><p>But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.</p><p>The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/a7e753dbfc786ce88d4949a0efd9828b\" tg-width=\"700\" tg-height=\"367\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>A combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.</p><p>To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase &amp; Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”</p><p>“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”</p><p>On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.</p></body></html>","source":"lsy1603348471595","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nStagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-03-19 13:35 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page><strong>MarketWatch</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station ...</p>\n\n<a href=\"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".DJI":"道琼斯",".IXIC":"NASDAQ Composite",".SPX":"S&P 500 Index"},"source_url":"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2220772443","content_text":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.Datastream, Haver Analytics, Goldman Sachs Global Investment Research“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.Datastream, Haver Analytics, Goldman Sachs Global Investment ResearchA combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase & Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9034071296,"gmtCreate":1647742912573,"gmtModify":1676534262277,"author":{"id":"3574399983193226","authorId":"3574399983193226","name":"MFME","avatar":"https://static.tigerbbs.com/9c7d2325aa9eb91869c4c7144270a75a","vip":1,"hat":"https://static.tigerbbs.com/b0a2963eb37c60c5d6d4a8dbcd266952","crmLevel":7,"crmLevelSwitch":1,"idStr":"3574399983193226","authorIdStr":"3574399983193226"},"htmlText":"What else...","listText":"What else...","text":"What else...","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":6,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9034071296","repostId":2220772443,"repostType":4,"repost":{"id":"2220772443","pubTimestamp":1647668140,"share":"https://ttm.financial/m/news/2220772443?lang=&edition=fundamental","pubTime":"2022-03-19 13:35","market":"us","language":"en","title":"Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says","url":"https://stock-news.laohu8.com/highlight/detail?id=2220772443","media":"MarketWatch","summary":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Si","content":"<html><head></head><body><p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic Strategy</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/e6b6710679b3aae2d6e541f6cc271d9a\" tg-width=\"700\" tg-height=\"466\" referrerpolicy=\"no-referrer\"/><span>Motorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.</span></p><p>Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.</p><p>Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.</p><p>Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.</p><p>Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/8d9f2a175dd3688f27a4dc2f91b128cc\" tg-width=\"700\" tg-height=\"434\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”</p><p>“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”</p><p>The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.</p><p>The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.</p><p>But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.</p><p>The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/a7e753dbfc786ce88d4949a0efd9828b\" tg-width=\"700\" tg-height=\"367\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>A combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.</p><p>To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase &amp; Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”</p><p>“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”</p><p>On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.</p></body></html>","source":"lsy1603348471595","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nStagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-03-19 13:35 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page><strong>MarketWatch</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station ...</p>\n\n<a href=\"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".DJI":"道琼斯",".IXIC":"NASDAQ Composite",".SPX":"S&P 500 Index"},"source_url":"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2220772443","content_text":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.Datastream, Haver Analytics, Goldman Sachs Global Investment Research“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.Datastream, Haver Analytics, Goldman Sachs Global Investment ResearchA combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase & Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9034042392,"gmtCreate":1647741825667,"gmtModify":1676534262112,"author":{"id":"3586859788675252","authorId":"3586859788675252","name":"MINH","avatar":"https://static.tigerbbs.com/536eb7671d76bffcba14ebf4ccd21b93","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3586859788675252","authorIdStr":"3586859788675252"},"htmlText":"Yes&nbsp;","listText":"Yes&nbsp;","text":"Yes","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":6,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9034042392","repostId":2220772443,"repostType":4,"repost":{"id":"2220772443","pubTimestamp":1647668140,"share":"https://ttm.financial/m/news/2220772443?lang=&edition=fundamental","pubTime":"2022-03-19 13:35","market":"us","language":"en","title":"Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says","url":"https://stock-news.laohu8.com/highlight/detail?id=2220772443","media":"MarketWatch","summary":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Si","content":"<html><head></head><body><p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic Strategy</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/e6b6710679b3aae2d6e541f6cc271d9a\" tg-width=\"700\" tg-height=\"466\" referrerpolicy=\"no-referrer\"/><span>Motorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.</span></p><p>Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.</p><p>Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.</p><p>Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.</p><p>Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/8d9f2a175dd3688f27a4dc2f91b128cc\" tg-width=\"700\" tg-height=\"434\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”</p><p>“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”</p><p>The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.</p><p>The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.</p><p>But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.</p><p>The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/a7e753dbfc786ce88d4949a0efd9828b\" tg-width=\"700\" tg-height=\"367\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>A combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.</p><p>To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase &amp; Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”</p><p>“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”</p><p>On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.</p></body></html>","source":"lsy1603348471595","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nStagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-03-19 13:35 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page><strong>MarketWatch</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station ...</p>\n\n<a href=\"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".DJI":"道琼斯",".IXIC":"NASDAQ Composite",".SPX":"S&P 500 Index"},"source_url":"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2220772443","content_text":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.Datastream, Haver Analytics, Goldman Sachs Global Investment Research“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.Datastream, Haver Analytics, Goldman Sachs Global Investment ResearchA combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase & Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9034049052,"gmtCreate":1647741084049,"gmtModify":1676534261991,"author":{"id":"3584243422406877","authorId":"3584243422406877","name":"11504348","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":5,"crmLevelSwitch":0,"idStr":"3584243422406877","authorIdStr":"3584243422406877"},"htmlText":"Don't discount the huge infrastructure investment being planned across the US, and expect European countries to follow suit as well. Add in the military spending by European governments and I reckon we'll see some strong growth yet.&nbsp;","listText":"Don't discount the huge infrastructure investment being planned across the US, and expect European countries to follow suit as well. Add in the military spending by European governments and I reckon we'll see some strong growth yet.&nbsp;","text":"Don't discount the huge infrastructure investment being planned across the US, and expect European countries to follow suit as well. Add in the military spending by European governments and I reckon we'll see some strong growth yet.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":7,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9034049052","repostId":2220772443,"repostType":4,"repost":{"id":"2220772443","pubTimestamp":1647668140,"share":"https://ttm.financial/m/news/2220772443?lang=&edition=fundamental","pubTime":"2022-03-19 13:35","market":"us","language":"en","title":"Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says","url":"https://stock-news.laohu8.com/highlight/detail?id=2220772443","media":"MarketWatch","summary":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Si","content":"<html><head></head><body><p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic Strategy</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/e6b6710679b3aae2d6e541f6cc271d9a\" tg-width=\"700\" tg-height=\"466\" referrerpolicy=\"no-referrer\"/><span>Motorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.</span></p><p>Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.</p><p>Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.</p><p>Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.</p><p>Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/8d9f2a175dd3688f27a4dc2f91b128cc\" tg-width=\"700\" tg-height=\"434\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”</p><p>“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”</p><p>The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.</p><p>The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.</p><p>But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.</p><p>The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/a7e753dbfc786ce88d4949a0efd9828b\" tg-width=\"700\" tg-height=\"367\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>A combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.</p><p>To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase &amp; Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”</p><p>“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”</p><p>On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.</p></body></html>","source":"lsy1603348471595","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nStagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-03-19 13:35 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page><strong>MarketWatch</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station ...</p>\n\n<a href=\"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".DJI":"道琼斯",".IXIC":"NASDAQ Composite",".SPX":"S&P 500 Index"},"source_url":"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2220772443","content_text":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.Datastream, Haver Analytics, Goldman Sachs Global Investment Research“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.Datastream, Haver Analytics, Goldman Sachs Global Investment ResearchA combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase & Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9034054642,"gmtCreate":1647740798196,"gmtModify":1676534261866,"author":{"id":"3581829959470650","authorId":"3581829959470650","name":"ccwee","avatar":"https://static.tigerbbs.com/652d99331e3c23c682d7e58cfc9f6544","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3581829959470650","authorIdStr":"3581829959470650"},"htmlText":"read","listText":"read","text":"read","images":[],"top":1,"highlighted":2,"essential":1,"paper":1,"likeSize":4,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9034054642","repostId":2220772443,"repostType":4,"repost":{"id":"2220772443","pubTimestamp":1647668140,"share":"https://ttm.financial/m/news/2220772443?lang=&edition=fundamental","pubTime":"2022-03-19 13:35","market":"us","language":"en","title":"Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says","url":"https://stock-news.laohu8.com/highlight/detail?id=2220772443","media":"MarketWatch","summary":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Si","content":"<html><head></head><body><p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic Strategy</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/e6b6710679b3aae2d6e541f6cc271d9a\" tg-width=\"700\" tg-height=\"466\" referrerpolicy=\"no-referrer\"/><span>Motorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.</span></p><p>Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.</p><p>Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.</p><p>Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.</p><p>Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/8d9f2a175dd3688f27a4dc2f91b128cc\" tg-width=\"700\" tg-height=\"434\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”</p><p>“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”</p><p>The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.</p><p>The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.</p><p>But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.</p><p>The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/a7e753dbfc786ce88d4949a0efd9828b\" tg-width=\"700\" tg-height=\"367\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>A combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.</p><p>To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase &amp; Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”</p><p>“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”</p><p>On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.</p></body></html>","source":"lsy1603348471595","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nStagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-03-19 13:35 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page><strong>MarketWatch</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station ...</p>\n\n<a href=\"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".DJI":"道琼斯",".IXIC":"NASDAQ Composite",".SPX":"S&P 500 Index"},"source_url":"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2220772443","content_text":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.Datastream, Haver Analytics, Goldman Sachs Global Investment Research“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.Datastream, Haver Analytics, Goldman Sachs Global Investment ResearchA combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase & Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9034055114,"gmtCreate":1647740637709,"gmtModify":1676534261825,"author":{"id":"3573731928321338","authorId":"3573731928321338","name":"claratan","avatar":"https://static.tigerbbs.com/9c6bbdac9048ff2e4b740f272576e2be","vip":1,"crmLevel":4,"crmLevelSwitch":0,"idStr":"3573731928321338","authorIdStr":"3573731928321338"},"htmlText":"Wow&nbsp;","listText":"Wow&nbsp;","text":"Wow","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9034055114","repostId":2220772443,"repostType":4,"repost":{"id":"2220772443","pubTimestamp":1647668140,"share":"https://ttm.financial/m/news/2220772443?lang=&edition=fundamental","pubTime":"2022-03-19 13:35","market":"us","language":"en","title":"Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says","url":"https://stock-news.laohu8.com/highlight/detail?id=2220772443","media":"MarketWatch","summary":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Si","content":"<html><head></head><body><p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic Strategy</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/e6b6710679b3aae2d6e541f6cc271d9a\" tg-width=\"700\" tg-height=\"466\" referrerpolicy=\"no-referrer\"/><span>Motorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.</span></p><p>Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.</p><p>Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.</p><p>Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.</p><p>Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/8d9f2a175dd3688f27a4dc2f91b128cc\" tg-width=\"700\" tg-height=\"434\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”</p><p>“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”</p><p>The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.</p><p>The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.</p><p>But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.</p><p>The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/a7e753dbfc786ce88d4949a0efd9828b\" tg-width=\"700\" tg-height=\"367\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>A combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.</p><p>To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase &amp; Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”</p><p>“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”</p><p>On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.</p></body></html>","source":"lsy1603348471595","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nStagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-03-19 13:35 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page><strong>MarketWatch</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station ...</p>\n\n<a href=\"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".DJI":"道琼斯",".IXIC":"NASDAQ Composite",".SPX":"S&P 500 Index"},"source_url":"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2220772443","content_text":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.Datastream, Haver Analytics, Goldman Sachs Global Investment Research“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.Datastream, Haver Analytics, Goldman Sachs Global Investment ResearchA combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase & Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9034055352,"gmtCreate":1647740623317,"gmtModify":1676534261825,"author":{"id":"3574808684684286","authorId":"3574808684684286","name":"DirtyGreen","avatar":"https://static.tigerbbs.com/fa007b8422fe75437cf1ad74252b636a","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3574808684684286","authorIdStr":"3574808684684286"},"htmlText":"Wow","listText":"Wow","text":"Wow","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":6,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9034055352","repostId":2220772443,"repostType":4,"repost":{"id":"2220772443","pubTimestamp":1647668140,"share":"https://ttm.financial/m/news/2220772443?lang=&edition=fundamental","pubTime":"2022-03-19 13:35","market":"us","language":"en","title":"Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says","url":"https://stock-news.laohu8.com/highlight/detail?id=2220772443","media":"MarketWatch","summary":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Si","content":"<html><head></head><body><p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic Strategy</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/e6b6710679b3aae2d6e541f6cc271d9a\" tg-width=\"700\" tg-height=\"466\" referrerpolicy=\"no-referrer\"/><span>Motorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.</span></p><p>Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.</p><p>Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.</p><p>Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.</p><p>Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/8d9f2a175dd3688f27a4dc2f91b128cc\" tg-width=\"700\" tg-height=\"434\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”</p><p>“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”</p><p>The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.</p><p>The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.</p><p>But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.</p><p>The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/a7e753dbfc786ce88d4949a0efd9828b\" tg-width=\"700\" tg-height=\"367\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>A combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.</p><p>To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase &amp; Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”</p><p>“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”</p><p>On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.</p></body></html>","source":"lsy1603348471595","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nStagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-03-19 13:35 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page><strong>MarketWatch</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station ...</p>\n\n<a href=\"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".DJI":"道琼斯",".IXIC":"NASDAQ Composite",".SPX":"S&P 500 Index"},"source_url":"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2220772443","content_text":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.Datastream, Haver Analytics, Goldman Sachs Global Investment Research“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.Datastream, Haver Analytics, Goldman Sachs Global Investment ResearchA combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase & Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9034050532,"gmtCreate":1647739615782,"gmtModify":1676534261682,"author":{"id":"4098783902581330","authorId":"4098783902581330","name":"ZenInv","avatar":"https://community-static.tradeup.com/news/033bd47e3df1977aaef462f53997e9f1","vip":1,"crmLevel":6,"crmLevelSwitch":0,"idStr":"4098783902581330","authorIdStr":"4098783902581330"},"htmlText":"Yes agree stagflation will be a huge dent in the economy. Yet I believe there are stocks that will outperform by 5-10x even in such unfavorable environment.&nbsp;","listText":"Yes agree stagflation will be a huge dent in the economy. Yet I believe there are stocks that will outperform by 5-10x even in such unfavorable environment.&nbsp;","text":"Yes agree stagflation will be a huge dent in the economy. Yet I believe there are stocks that will outperform by 5-10x even in such unfavorable environment.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":6,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9034050532","repostId":2220772443,"repostType":4,"repost":{"id":"2220772443","pubTimestamp":1647668140,"share":"https://ttm.financial/m/news/2220772443?lang=&edition=fundamental","pubTime":"2022-03-19 13:35","market":"us","language":"en","title":"Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says","url":"https://stock-news.laohu8.com/highlight/detail?id=2220772443","media":"MarketWatch","summary":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Si","content":"<html><head></head><body><p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic Strategy</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/e6b6710679b3aae2d6e541f6cc271d9a\" tg-width=\"700\" tg-height=\"466\" referrerpolicy=\"no-referrer\"/><span>Motorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.</span></p><p>Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.</p><p>Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.</p><p>Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.</p><p>Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/8d9f2a175dd3688f27a4dc2f91b128cc\" tg-width=\"700\" tg-height=\"434\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”</p><p>“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”</p><p>The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.</p><p>The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.</p><p>But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.</p><p>The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/a7e753dbfc786ce88d4949a0efd9828b\" tg-width=\"700\" tg-height=\"367\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>A combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.</p><p>To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase &amp; Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”</p><p>“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”</p><p>On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.</p></body></html>","source":"lsy1603348471595","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nStagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-03-19 13:35 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page><strong>MarketWatch</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station ...</p>\n\n<a href=\"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".DJI":"道琼斯",".IXIC":"NASDAQ Composite",".SPX":"S&P 500 Index"},"source_url":"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2220772443","content_text":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.Datastream, Haver Analytics, Goldman Sachs Global Investment Research“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.Datastream, Haver Analytics, Goldman Sachs Global Investment ResearchA combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase & Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9034050809,"gmtCreate":1647739563983,"gmtModify":1676534261682,"author":{"id":"3577078420999059","authorId":"3577078420999059","name":"Chloeyeo","avatar":"https://static.tigerbbs.com/c0640230dfe63a2ae4b136fc5bfc6d62","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3577078420999059","authorIdStr":"3577078420999059"},"htmlText":"Please comment and like","listText":"Please comment and like","text":"Please comment and like","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":5,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9034050809","repostId":2220772443,"repostType":4,"repost":{"id":"2220772443","pubTimestamp":1647668140,"share":"https://ttm.financial/m/news/2220772443?lang=&edition=fundamental","pubTime":"2022-03-19 13:35","market":"us","language":"en","title":"Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says","url":"https://stock-news.laohu8.com/highlight/detail?id=2220772443","media":"MarketWatch","summary":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Si","content":"<html><head></head><body><p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic Strategy</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/e6b6710679b3aae2d6e541f6cc271d9a\" tg-width=\"700\" tg-height=\"466\" referrerpolicy=\"no-referrer\"/><span>Motorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.</span></p><p>Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.</p><p>Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.</p><p>Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.</p><p>Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/8d9f2a175dd3688f27a4dc2f91b128cc\" tg-width=\"700\" tg-height=\"434\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”</p><p>“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”</p><p>The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.</p><p>The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.</p><p>But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.</p><p>The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/a7e753dbfc786ce88d4949a0efd9828b\" tg-width=\"700\" tg-height=\"367\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>A combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.</p><p>To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase &amp; Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”</p><p>“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”</p><p>On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.</p></body></html>","source":"lsy1603348471595","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nStagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-03-19 13:35 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page><strong>MarketWatch</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station ...</p>\n\n<a href=\"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".DJI":"道琼斯",".IXIC":"NASDAQ Composite",".SPX":"S&P 500 Index"},"source_url":"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2220772443","content_text":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.Datastream, Haver Analytics, Goldman Sachs Global Investment Research“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.Datastream, Haver Analytics, Goldman Sachs Global Investment ResearchA combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase & Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9034022635,"gmtCreate":1647739060548,"gmtModify":1676534261589,"author":{"id":"3552620505563005","authorId":"3552620505563005","name":"CubTrader","avatar":"https://static.tigerbbs.com/bf7145f19b342af15e8d455a8e30aaa8","vip":1,"hat":"https://static.tigerbbs.com/f84d87792f02cf78e80ee34979fd31e5","crmLevel":5,"crmLevelSwitch":0,"idStr":"3552620505563005","authorIdStr":"3552620505563005"},"htmlText":"Then what will be a good portfolio?","listText":"Then what will be a good portfolio?","text":"Then what will be a good portfolio?","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":8,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9034022635","repostId":2220772443,"repostType":4,"repost":{"id":"2220772443","pubTimestamp":1647668140,"share":"https://ttm.financial/m/news/2220772443?lang=&edition=fundamental","pubTime":"2022-03-19 13:35","market":"us","language":"en","title":"Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says","url":"https://stock-news.laohu8.com/highlight/detail?id=2220772443","media":"MarketWatch","summary":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Si","content":"<html><head></head><body><p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic Strategy</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/e6b6710679b3aae2d6e541f6cc271d9a\" tg-width=\"700\" tg-height=\"466\" referrerpolicy=\"no-referrer\"/><span>Motorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.</span></p><p>Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.</p><p>Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.</p><p>Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.</p><p>Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/8d9f2a175dd3688f27a4dc2f91b128cc\" tg-width=\"700\" tg-height=\"434\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”</p><p>“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”</p><p>The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.</p><p>The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.</p><p>But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.</p><p>The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/a7e753dbfc786ce88d4949a0efd9828b\" tg-width=\"700\" tg-height=\"367\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>A combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.</p><p>To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase &amp; Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”</p><p>“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”</p><p>On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.</p></body></html>","source":"lsy1603348471595","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nStagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-03-19 13:35 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page><strong>MarketWatch</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station ...</p>\n\n<a href=\"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".DJI":"道琼斯",".IXIC":"NASDAQ Composite",".SPX":"S&P 500 Index"},"source_url":"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2220772443","content_text":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.Datastream, Haver Analytics, Goldman Sachs Global Investment Research“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.Datastream, Haver Analytics, Goldman Sachs Global Investment ResearchA combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase & Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9034028757,"gmtCreate":1647738786540,"gmtModify":1676534261582,"author":{"id":"3582015516749888","authorId":"3582015516749888","name":"HH浩","avatar":"https://static.tigerbbs.com/2639351c97027c6f71c4d9729ef216d8","vip":1,"crmLevel":4,"crmLevelSwitch":0,"idStr":"3582015516749888","authorIdStr":"3582015516749888"},"htmlText":"Lost decade like Japan?&nbsp;","listText":"Lost decade like Japan?&nbsp;","text":"Lost decade like Japan?","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":7,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9034028757","repostId":2220772443,"repostType":4,"repost":{"id":"2220772443","pubTimestamp":1647668140,"share":"https://ttm.financial/m/news/2220772443?lang=&edition=fundamental","pubTime":"2022-03-19 13:35","market":"us","language":"en","title":"Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says","url":"https://stock-news.laohu8.com/highlight/detail?id=2220772443","media":"MarketWatch","summary":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Si","content":"<html><head></head><body><p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic Strategy</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/e6b6710679b3aae2d6e541f6cc271d9a\" tg-width=\"700\" tg-height=\"466\" referrerpolicy=\"no-referrer\"/><span>Motorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.</span></p><p>Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.</p><p>Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.</p><p>Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.</p><p>Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/8d9f2a175dd3688f27a4dc2f91b128cc\" tg-width=\"700\" tg-height=\"434\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”</p><p>“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”</p><p>The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.</p><p>The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.</p><p>But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.</p><p>The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/a7e753dbfc786ce88d4949a0efd9828b\" tg-width=\"700\" tg-height=\"367\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>A combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.</p><p>To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase &amp; Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”</p><p>“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”</p><p>On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.</p></body></html>","source":"lsy1603348471595","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nStagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-03-19 13:35 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page><strong>MarketWatch</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station ...</p>\n\n<a href=\"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".DJI":"道琼斯",".IXIC":"NASDAQ Composite",".SPX":"S&P 500 Index"},"source_url":"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2220772443","content_text":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.Datastream, Haver Analytics, Goldman Sachs Global Investment Research“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.Datastream, Haver Analytics, Goldman Sachs Global Investment ResearchA combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase & Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":9034064878,"gmtCreate":1647737825355,"gmtModify":1676534261420,"author":{"id":"3581937910767045","authorId":"3581937910767045","name":"Pluto891","avatar":"https://static.tigerbbs.com/c9963f2ef3d3ad2aff28340461d3d6d0","vip":1,"crmLevel":2,"crmLevelSwitch":1,"idStr":"3581937910767045","authorIdStr":"3581937910767045"},"htmlText":"allocation is still a good way to diversify. just arrange the number. But if 60/40 were past trends... probably still good to follow.&nbsp; sometimes , dun read too much.&nbsp;[Happy]&nbsp;","listText":"allocation is still a good way to diversify. just arrange the number. But if 60/40 were past trends... probably still good to follow.&nbsp; sometimes , dun read too much.&nbsp;[Happy]&nbsp;","text":"allocation is still a good way to diversify. just arrange the number. But if 60/40 were past trends... probably still good to follow. sometimes , dun read too much. [Happy]","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":4,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9034064878","repostId":2220772443,"repostType":4,"repost":{"id":"2220772443","pubTimestamp":1647668140,"share":"https://ttm.financial/m/news/2220772443?lang=&edition=fundamental","pubTime":"2022-03-19 13:35","market":"us","language":"en","title":"Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says","url":"https://stock-news.laohu8.com/highlight/detail?id=2220772443","media":"MarketWatch","summary":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Si","content":"<html><head></head><body><p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic Strategy</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/e6b6710679b3aae2d6e541f6cc271d9a\" tg-width=\"700\" tg-height=\"466\" referrerpolicy=\"no-referrer\"/><span>Motorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.</span></p><p>Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.</p><p>Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.</p><p>Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.</p><p>Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/8d9f2a175dd3688f27a4dc2f91b128cc\" tg-width=\"700\" tg-height=\"434\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”</p><p>“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”</p><p>The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.</p><p>The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.</p><p>But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.</p><p>The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.</p><p class=\"t-img-caption\"><img src=\"https://static.tigerbbs.com/a7e753dbfc786ce88d4949a0efd9828b\" tg-width=\"700\" tg-height=\"367\" referrerpolicy=\"no-referrer\"/><span>Datastream, Haver Analytics, Goldman Sachs Global Investment Research</span></p><p>A combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.</p><p>To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase &amp; Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”</p><p>“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”</p><p>On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.</p></body></html>","source":"lsy1603348471595","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Stagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nStagflation Is Raising the Risk of `Lost Decade' for 60/40 Portfolio of Stocks and Bonds, Goldman Sachs Says\n</h2>\n\n<h4 class=\"meta\">\n\n\n2022-03-19 13:35 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page><strong>MarketWatch</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station ...</p>\n\n<a href=\"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".DJI":"道琼斯",".IXIC":"NASDAQ Composite",".SPX":"S&P 500 Index"},"source_url":"https://www.marketwatch.com/story/stagflation-is-raising-the-risk-of-lost-decade-for-60-40-portfolio-of-stocks-and-bonds-goldman-sachs-says-11647624998?mod=home-page","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2220772443","content_text":"‘The demise of the 60/40 portfolio has been a long time coming, and it’s finally here,’ says John Silvia  of Dynamic Economic StrategyMotorists lined up on Thursday for free gas at a filling station in the Humboldt Park neighborhood of Chicago after businessman Willie Wilson promised to give away $200,000 in gas at a variety of stations.Rising stagflation risks in the U.S. and Europe are raising the possibility of a “lost decade” for the 60/40 portfolio mix of stocks and bonds, historically seen as a reliable investing choice for those with moderate risk appetites.Such a “lost decade” is defined as an extended period of poor real returns, says Goldman Sachs Group Inc. portfolio strategist Christian Mueller-Glissmann and his colleagues Cecilia Mariotti and Andrea Ferrario. Since the start of 2022, 60/40 portfolios in the U.S. and Europe are down more than 10% in real terms, the Goldman team wrote in a note released Friday.Risks of slower growth plus inflation are being amplified by the ongoing the conflict between Russia and Ukraine, and are already taking a toll on many investors. The three major U.S. stock indexes are off by 5% to 12% this year, with the tech-heavy Nasdaq Composite dropping the most. Meanwhile, bonds are also having a rough time — with the 10-year Treasury note putting in its worst year-over-year performance since 2013 as of Thursday, which has pushed its yield above 2.1%. That’s diminished the performance of the 60% allocation to equities and 40% allocation to bonds.Signs of stagflation worries are evident in rates markets. The 10-year U.S. breakeven inflation rate, a gauge of inflation expectations, has reached its highest level since the 1990s, according to Goldman Sachs. Meanwhile, inflation-adjusted real yields remain near their lowest levels in decades, reflecting pessimism about economic growth in coming years. And the widely followed spread between 2-year and 10-year Treasury yields is inching its way closer to an inversion, typically a harbinger of recession.Datastream, Haver Analytics, Goldman Sachs Global Investment Research“The No. 1 problem with the 60/40 portfolio is that the pace of inflation means real returns on the bond side will be negative,” said John Silvia, founder and chief executive of Dynamic Economic Strategy in Captiva Island, Fla. “And slower economic growth means slower profit growth, which means the stock side of the portfolio gets hit as well.”“So the total portfolio performance will probably be disappointing relative to past years, and it could entirely last a full decade,” Silvia said via phone. “The reason is that you’ve had arbitrarily low interest rates for four to five years, and a lot of speculation in the marketplace with people reaching for yield. The demise of the 60/40 portfolio has been a long time coming, and it’s finally here.”The lost decade envisioned by Goldman Sachs marks a turnabout from the last cycle, which benefited from what Mueller-Glissmann and colleagues call a “structural ‘Goldilocks’ regime.” That’s when low inflation and real rates boosted valuations and profit growth, despite relatively weak economic growth. Equities and bonds each performed well side-by-side — with real returns on the 60/40 mix coming in at roughly 7% to 8% each year during the last cycle, compared with a 5% long-run average, they said.The thinking behind the 60/40 mix in the first place has been the notion that bonds can act as ballast to the riskiness inherent in equities. Private pension plans are one investor category that has continued to cling to the mix and have “rarely deviated from it,” according to Deutsche Bank researchers.But lost decades are more common than many think, according to Mueller-Glissmann, Mariotti and Ferrario. They’ve occurred during World War I, World War II and the 1970s — following strong bull markets marked by elevated valuations. And the likelihood of a lost decade rises in the face of stagflation, they said.The following chart reflects 1-year and 10-year drawdowns in the 60/40 portfolio through the decades.Datastream, Haver Analytics, Goldman Sachs Global Investment ResearchA combination of other investments can help reduce the risk of another 60/40 lost decade for investors, the Goldman team said. They include allocations to “real assets” such as commodities, real estate and infrastructure, as well as greater diversification in overseas markets. Investors should also consider value and high-dividend-yielding stocks, as well as convertible bonds, according to Goldman.To be sure, not everyone’s on board with the idea of a prolonged period of poor 60/40 returns. Thomas Salopek, a strategist at JPMorgan Chase & Co. who warned in January that the 60/40 mix was “in danger,” says he thinks the U.S. will avoid actual stagflation. “We believe,” he said, “there will be no lost decade for the 60/40.”“For now, the environment is still high growth and high inflation,” he wrote in an email to MarketWatch on Friday. With yields historically rising during a Fed rate-hike cycle, “there is a healthy stock vs. bond risk premium that can finally be harvested as risk aversion recedes. So stock outperformance should more than make up for bond weakness, once risk appetite recovers.”On Friday, Treasury yields turned mixed as investors factored in the prospects of slower growth.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"hasMoreComments":true,"newsSizeData":{"likeSize":1287,"commentSize":74,"repostSize":0,"favoriteSize":1,"likeStatus":false,"favoriteStatus":false}}