Benjamin Halliburton opines on the valuation of stocks versus bonds in his most recent article published by ForbesBooks.com.
The 40% bond allocation has killed the 60/40 balanced portfolio. Most investors have heard the saying, “Don’t put all your eggs in one basket.” This is a catchy phrase to encourage investors to diversify their portfolio. And what do they typically do? The majority embrace the standard asset allocation model of 60% stocks and 40% bonds.
The Barclays US Aggregate Bond Index – Historical Yield 1980-2017
The bond market experienced one of the most rapid and significant increases in yields across all bond maturities in several years during November. Instead of the Federal Reserve acting through monetary policy to gradually move rates higher as had been widely anticipated, the unexpected result of the Presidential election led to the stunning move in bond yields this month.