Valuations:The 60/40 Balanced Portfolio
Valuations are, in my long experience, a very poor guide on their own to short or even medium-term outcomes.
valuations are an excellent and important starting point, but must be paired with macro factors, and tactical elements to gain conviction and finesse timing
The table below outlines the major parts of the research process: typically the process involves starting with a valuation anchor to guide the strategic view, then bringing in macro/cycle/policy considerations to build out the medium-term view, and then rounding it out with tactical considerations (sentiment/technicals) to help finesse the timing aspect and raise conviction in the idea.
No wonder the 60/40 portfolio got messed up this year, it was trading at record expensive valuations in Dec 2021!Interesting follow-on chart, this time looking at the expected return outputs from our capital market assumptions...
60/40 was indeed "dead' in terms of forward looking returns for much of late 2020-2021.
Looking very much alive and kicking now tho
https://twitter.com/topdowncharts/status/1577861671300710400
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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