Bank of America declares 'the end of the 60-40' standard portfolio

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indexlover
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Bank of America declares 'the end of the 60-40' standard portfolio

Post by indexlover » Tue Oct 15, 2019 3:20 pm

https://www.morningstar.com/news/market ... -portfolio

"The challenge for investors today is that both of those benefits from bonds, diversification and risk-reduction, seem to be weakening, and this is happening at a time when positioning in many fixed income sectors is incredibly crowded, making bonds more vulnerable to sharp, sudden selloffs when active managers rebalance," the authors wrote.

Thoughts on this bond "bubble" research note ?

EDIT: Mr. Taylor Larimore reported that the Morningstar link doesn't work anymore... I have included another link :
https://www.marketwatch.com/story/bank- ... 2019-10-15
Last edited by indexlover on Sat Nov 09, 2019 4:51 pm, edited 1 time in total.
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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by 123 » Tue Oct 15, 2019 3:28 pm

I thought the article was pretty innocuous and mostly useless. It says Bank of America thinks investors should probably have more equities than 60% in their portfolios but nowhere did I see any mention of investor age. So maybe that means that all along Bank of America has thought all investors should be 60/40 stocks/bonds. Now maybe that is okay for a population as a whole but it is the kind of one size fits all thinking you get from a bank.

An example of a good reason to stay away from banks for investing insight.
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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by Tyler Aspect » Tue Oct 15, 2019 3:30 pm

Shall we say "lots of laughs?"
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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by vineviz » Tue Oct 15, 2019 3:33 pm

indexlover wrote:
Tue Oct 15, 2019 3:20 pm
https://www.morningstar.com/news/market ... -portfolio

"The challenge for investors today is that both of those benefits from bonds, diversification and risk-reduction, seem to be weakening, and this is happening at a time when positioning in many fixed income sectors is incredibly crowded, making bonds more vulnerable to sharp, sudden selloffs when active managers rebalance," the authors wrote.

Thoughts on this bond "bubble" research note ?
The authors of the research note either don't understand the nature of diversification or were grossly misquoted in the paragraph about correlations. They seem to think that correlations need to be negative in order to get diversification benefits, but this is obviously not true.

In my mind, the biggest problem with the 60/40 portfolio going forward isn't the diversification but the low expected returns (at least from the classic Bogle-esque implementation of 60% US stocks and 40% US bonds). A real, inflation-adjusted return of 0% over the next decade for such a portfolio is entirely possible and maybe even likely.

I'm sure Bank of America would like to sell investors on complicated solutions, but I wouldn't be optimistic they'll help anyone's retirement except the financial advisors at Bank of America.

Nonetheless, a robustly diversified portfolio of global stocks and bonds is probably more crucial for a 2019 or 2020 retiree than for any cohort of retirees going back for several decades.
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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by WhiteMaxima » Tue Oct 15, 2019 3:54 pm

In a bull market and in a low yield environment, it is true that many dividend paying stock serves like bond (T, MO, etc). Bond yield is so low, however, AAA bond preserve principle. In a bear market, stock investor could lose principle, dividend could get cut. Bond principle is preserved if you hold until it is mature. Don't know why BAC recommend "the end of 60/40.

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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by lukestuckenhymer » Tue Oct 15, 2019 3:58 pm

Bonds, formerly for safety, are no longer safe... so "take on more risk"?? What kind of logic is that?

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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by Taylor Larimore » Tue Oct 15, 2019 4:00 pm

indexlover wrote:
Tue Oct 15, 2019 3:20 pm
https://www.morningstar.com/news/market ... -portfolio

"The challenge for investors today is that both of those benefits from bonds, diversification and risk-reduction, seem to be weakening, and this is happening at a time when positioning in many fixed income sectors is incredibly crowded, making bonds more vulnerable to sharp, sudden selloffs when active managers rebalance," the authors wrote.

Thoughts on this bond "bubble" research note ?
Indexlover:

Knowledgeable investors never adopt a 60% stock/40% bond portfolio automatically. Each investor should make this important decision based on their goal(s), time-frame, risk-tolerance, and personal financial situation.

Not all bonds are vulnerable to "sharp, sudden selloffs." For example, Vanguard Total Bond Market Index Fund has never had an annual loss exceeding 3%.

In my opinion, this is another example of a bank trying to stimulate sales (and commissions). I don't know of any industry that has paid more fines for unethical behavior than the banking industry.

Best wishes.
Taylor
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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by aristotelian » Tue Oct 15, 2019 4:10 pm

Earlier this year these same guys claimed "interest rates are rising". Who would want to own bonds when interest rates are going up?
https://bankofamerica40.newshq.business ... _Rates.pdf

Now they are saying "interest rates have hit bottom", who would want to own bonds when yields are close to zero?

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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by goodenyou » Tue Oct 15, 2019 6:58 pm

Buy a Bank of America/Merrill annuity, of course!
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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by Grt2bOutdoors » Tue Oct 15, 2019 7:38 pm

goodenyou wrote:
Tue Oct 15, 2019 6:58 pm
Buy a Bank of America/Merrill annuity, of course!
Nah! Buy Bank of America stock! If it’s good for Warren Buffett (just asked Federal Reserve for permission to exceed 10% cap on ownership), then it should be good for everyone else.
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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by laidback_and_relaxed » Tue Oct 15, 2019 7:52 pm

This, and other similar positions for greater equity positions in investors' asset allocation, seem to ignore that for many their investment needs to produce income that will regularly be withdrawn. Bonds, at whatever rate of return, are typically safer than equities (keeping the discussion to investment grade at this point), and typically a greater rate of return than cash. Regardless of the expected return, makes sense to beat inflation (over cash) and rely on a more stable (less volatile) asset class for near term investment drawdown for expenses.

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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by UpperNwGuy » Tue Oct 15, 2019 8:03 pm

Why is Buffet getting involved in the less-than-reliable financial sector?

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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by AerialWombat » Tue Oct 15, 2019 8:18 pm

vineviz wrote:
Tue Oct 15, 2019 3:33 pm
A real, inflation-adjusted return of 0% over the next decade for such a portfolio is entirely possible and maybe even likely.
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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by Cubicle » Tue Oct 15, 2019 8:36 pm

Shilling by BofA. My father banks there (from the days of Fleet bank, & prior to that, NatWest). I generally dislike them. High fees, pushy products. Despite their relevance, I don't consider them relevant in terms of a Boglehead.

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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by GaryA505 » Tue Oct 15, 2019 8:40 pm

AerialWombat wrote:
Tue Oct 15, 2019 8:18 pm
vineviz wrote:
Tue Oct 15, 2019 3:33 pm
A real, inflation-adjusted return of 0% over the next decade for such a portfolio is entirely possible and maybe even likely.
Say whaaaat? I thought nobody knows nothin’. Do you know something? :)
That was my thought when I read that part. The vineviz crystal ball must be working pretty good today. :wink:

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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by vineviz » Tue Oct 15, 2019 8:49 pm

AerialWombat wrote:
Tue Oct 15, 2019 8:18 pm
vineviz wrote:
Tue Oct 15, 2019 3:33 pm
A real, inflation-adjusted return of 0% over the next decade for such a portfolio is entirely possible and maybe even likely.
Say whaaaat? I thought nobody knows nothin’. Do you know something? :)
I'm not making a prediction, but I can calculate an expected return.
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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by fwellimort » Tue Oct 15, 2019 8:55 pm

Cubicle wrote:
Tue Oct 15, 2019 8:36 pm
Shilling by BofA. I generally dislike them. High fees, pushy products. Despite their relevance, I don't consider them relevant in terms of a Boglehead.
If you have over $100k in assets and you move those assets to Merrill Lynch, you get access to 5.25% cashback credit card with no annual fee.
Plus, the trades are free anyways at that point for all practical matter so there's no real difference in terms of brokerage service (ETFs of Vanguard, iShares, etc. are all available).
In addition, they tend to give you bonus when you sign up for their Merrill Lynch account if you have a lot of assets (and many people do take advantage of the program to churn -move assets every 6 months-).

I think BoA is actually not that bad and great for Bogleheaders (those who know what they are doing). Their cashbacks on their credit cards are quite something and I believe BoA through its Merrill Edge actually has a high yield savings account for those who have net asset of over $100k.
Many Bogleheaders here have over $100k so for those that do, these "big banks" provide service that might prove beneficial in their daily lives.

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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by JoMoney » Tue Oct 15, 2019 9:28 pm

vineviz wrote:
Tue Oct 15, 2019 8:49 pm
AerialWombat wrote:
Tue Oct 15, 2019 8:18 pm
vineviz wrote:
Tue Oct 15, 2019 3:33 pm
A real, inflation-adjusted return of 0% over the next decade for such a portfolio is entirely possible and maybe even likely.
Say whaaaat? I thought nobody knows nothin’. Do you know something? :)
I'm not making a prediction, but I can calculate an expected return.
Unfortunately, being able to calculate it doesn't make any more useful. An "expected return" is just one of a very broad range of possibilities, and anyone with a reasonable sounding model can come up with just about any story.
Based on historical returns, a 60% U.S. Stock / 40% U.S. Treasury portfolio having a decade of 0% real return would be somewhere in the bottom 10% of possible outcomes. We can add additional factors like CAPE valuation or Butter Production in Bangladesh to the model and pretend that adds precision, but most of these models have explanatory ability worse than a coin flip.
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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by Random Musings » Tue Oct 15, 2019 9:50 pm

What happens if stocks get crushed more than bonds in the near future. Will it then be the end of the BOA 80/20?

I'll just wait for Goldman Sachs to tell me what to do. If they publish it for public consumption, then the prudent thing is to do the opposite.

Just another form of financial porn.

RM
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New research claiming the reasons to invest in bonds have mostly disappeared.

Post by LongTermEtfHolder » Tue Oct 15, 2019 10:00 pm

[Post merged into here, see below. --admin LadyGeek]

Marketwatch is reporting on new research from Bank of America claiming the traditional reasons for investing in bonds are largely no longer valid.

From what I gather from the article, the researchers - Derek Harris and Jared Woodard - argue that the two main traditional reasons for investing in bonds are:
  1. Hedging against equities dips.
  2. Collecting fixed income.
The researchers claim that bonds no longer serve the first purpose well, as their volatility has increased. Also, the negative correlation to stock valuations, that has made bonds a good instrument to hedge equity exposure, is a historical anomaly that is likely to reverse soon: of the past 85 years, this correlation has been negative for only the last 20 years, before which it was positive.

The researchers further claim that bonds no longer serve the second purpose well, either, because of large drops in bond yields:
Indeed, the $339 billion in inflows to bond funds globally in 2019, and the $208 billion in outflows from global equity funds underscore the power of the ongoing rally in bonds, which has caused bond yields to fall enough that there are now 1,100 global stocks that are providing dividend yields above the average yield of global government bonds.
The elimination of both these reasons leaves us with no motive to invest in bonds at all. Indeed the researchers encourage investors to invest in equities instead, particularly those equities offering high-dividend yield, which would thus serve the same income needs you would traditionally expect from bonds.

What do you think of these claims?

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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by goodenyou » Tue Oct 15, 2019 10:02 pm

Random Musings wrote:
Tue Oct 15, 2019 9:50 pm
What happens if stocks get crushed more than bonds in the near future. Will it then be the end of the BOA 80/20?

I'll just wait for Goldman Sachs to tell me what to do. If they publish it for public consumption, then the prudent thing is to do the opposite.

Just another form of financial porn.

RM
Jamie Diamond is predicting that "of course there is a recession ahead". Is he telling you what to do?
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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by LadyGeek » Tue Oct 15, 2019 10:10 pm

I merged LongTermEtfHolder's post into the on-going discussion.
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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by FrugalInvestor » Tue Oct 15, 2019 10:50 pm

Cubicle wrote:
Tue Oct 15, 2019 8:36 pm
Shilling by BofA. My father banks there (from the days of Fleet bank, & prior to that, NatWest). I generally dislike them. High fees, pushy products. Despite their relevance, I don't consider them relevant in terms of a Boglehead.
They're relevant to me. I use them for free checking, free billpay, a 3% cash back (online purchases only, 2% otherwise) no fee credit card, etc. So no fees at all and I never have products pushed at me, but that doesn't mean it doesn't happen to others. I would agree that as a Boglehead they have zero relevance to me when it comes to investing.
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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by TomCat96 » Tue Oct 15, 2019 11:06 pm

I'm not in a position to be arguing if they are shilling or not.

I feel more comfortable picking apart the reasoning. And as it stands, the reasoning doesn't make much sense, as it's lots of unsupported sensationalist...sentences.

"The core premise of every 60/40 portfolio is that bonds can hedge against risks to growth and equities can hedge against inflation; their returns are negatively correlated," Woodard and Harris add. "But this assumption was only true over the past two decades and was mostly false over the prior 65 years. The big risk is that the correlation could flip, and now the longest period of negative correlation in history is coming to an end as policy makers jolt markets with attempts to boost growth."

As I see it, the rationale of entire blog post depends on that one sentence.

"The big risk is that...a meteor could hit the world tomorrow"

The entire premise is unfounded and slipped in there as a certainty.

"Meanwhile, higher bond market volatility has lead to U.S. government debt providing worse risk-adjusted return over the last three years than any other asset class other than commodities, while the popularity of bonds has forced investors to take on more risk to get the same yield."

The followup sentence in the article sounds absolutely ridiculous. Is the second worst risk adjusted return over the past three years a metric we now use?

Do we measure risk adjusted return over three year periods? I dunno, do we compare the volatility of stocks to bonds over a three year period?
Do we even compare the returns of stocks to bonds over a three year period?

If bonds outperform stocks over a three year period, do I get to declare the end of stocks?

All I see here is sensationalist drivel supported by a spaghetti of financial words that I have to do the work to put together into a coherent message.

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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by nedsaid » Tue Oct 15, 2019 11:15 pm

The rumors of the death of the 60/40 balanced portfolio are greatly exaggerated.
A fool and his money are good for business.

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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by Tyler Aspect » Tue Oct 15, 2019 11:18 pm

The bond yields are low right now. But the stabilizing nature of bonds can continue to work its contribution in a 60% stock / 40% bond portfolio. The proper response is to recognize a lower forward estimation of portfolio return. Just bumping stock allocation even higher can backfire if the investor has appetite for risk, but no toleration for losses.
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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by bluquark » Tue Oct 15, 2019 11:26 pm

JoMoney wrote:
Tue Oct 15, 2019 9:28 pm
Based on historical returns, a 60% U.S. Stock / 40% U.S. Treasury portfolio having a decade of 0% real return would be somewhere in the bottom 10% of possible outcomes. We can add additional factors like CAPE valuation or Butter Production in Bangladesh to the model and pretend that adds precision, but most of these models have explanatory ability worse than a coin flip.
Bonds having a near-zero real return is the big factor today, and the explanatory ability of that is huge. Equity risk premium doesn't look too different from historical trends but that's just additive on top of risk-free returns. Equities just need to more or less match bonds over the next decade for it to happen, which is by no means a bottom 10% scenario but a rather common one.

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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by columbia » Wed Oct 16, 2019 4:52 am

lukestuckenhymer wrote:
Tue Oct 15, 2019 3:58 pm
Bonds, formerly for safety, are no longer safe... so "take on more risk"?? What kind of logic is that?
It’s, of course, a pretty terrible line of thought.

Even if there this a problem to solve, there’s certainly not a clear solution. Or even a solution at all.

If folks want to take on more equity risk than they had previously planned, they should also prepare for that risk showing up and knocking on their front door. And it won’t be an Uber driver delivering a free lunch.

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Re: New research claiming the reasons to invest in bonds have mostly disappeared.

Post by robertmcd » Wed Oct 16, 2019 9:53 am

LongTermEtfHolder wrote:
Tue Oct 15, 2019 10:00 pm
[Post merged into here, see below. --admin LadyGeek]

Marketwatch is reporting on new research from Bank of America claiming the traditional reasons for investing in bonds are largely no longer valid.

From what I gather from the article, the researchers - Derek Harris and Jared Woodard - argue that the two main traditional reasons for investing in bonds are:
  1. Hedging against equities dips.
  2. Collecting fixed income.
The researchers claim that bonds no longer serve the first purpose well, as their volatility has increased. Also, the negative correlation to stock valuations, that has made bonds a good instrument to hedge equity exposure, is : of the past 85 years, this correlation has been negative for only the last 20 years, before which it was positive.

The researchers further claim that bonds no longer serve the second purpose well, either, because of large drops in bond yields:
Indeed, the $339 billion in inflows to bond funds globally in 2019, and the $208 billion in outflows from global equity funds underscore the power of the ongoing rally in bonds, which has caused bond yields to fall enough that there are now 1,100 global stocks that are providing dividend yields above the average yield of global government bonds.
The elimination of both these reasons leaves us with no motive to invest in bonds at all. Indeed the researchers encourage investors to invest in equities instead, particularly those equities offering high-dividend yield, which would thus serve the same income needs you would traditionally expect from bonds.

What do you think of these claims?
The earnings yield of stocks can decline dramatically. Just because treasury yields are lower doesn't mean that stocks are a great deal now. The bond market may be saying that they think earnings growth will slow/turn negative. "a historical anomaly that is likely to reverse soon" - the amount of people that have been wrong on this is incredible (probably 99% of financial advisors were wrong on their treasury yield predictions the past 10 yrs and it cost their clients money). The future looks like this - more debt, worse demographics, lower growth, etc. But I can tell you this - if the stock/treasury bond correlation turns positive while stocks are dropping, it will be a global bloodbath of asset price destruction as quadrillions in derivatives exposure unwind.

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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by Harry Livermore » Wed Oct 16, 2019 3:03 pm

Random Musings wrote:
Tue Oct 15, 2019 9:50 pm

I'll just wait for Goldman Sachs to tell me what to do. If they publish it for public consumption, then the prudent thing is to do the opposite.
I have often said the same thing! I assume any "advice" given by Goldman publicly means that they are already on the opposite side of the trade. Someone should backtest that.
Cheers

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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by dharrythomas » Wed Oct 16, 2019 3:27 pm

UpperNwGuy wrote:
Tue Oct 15, 2019 8:03 pm
Why is Buffet getting involved in the less-than-reliable financial sector?
Buffett has always been involved in the financial. His father was a stock broker and a congressman. He got started running investment partnerships and earned high fees. BRK owns GEICO and other insurance companies, one owned a whole bank, invests in American Express, took over Salomon Brothers during a scandal, invested in Goldman Sachs and GE in 2008, and owns a big stake in Wells Fargo. I’m sure that is a partial list, Buffett is embedded in the financial industry.

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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by Random Musings » Wed Oct 16, 2019 4:27 pm

goodenyou wrote:
Tue Oct 15, 2019 10:02 pm
Random Musings wrote:
Tue Oct 15, 2019 9:50 pm
What happens if stocks get crushed more than bonds in the near future. Will it then be the end of the BOA 80/20?

I'll just wait for Goldman Sachs to tell me what to do. If they publish it for public consumption, then the prudent thing is to do the opposite.

Just another form of financial porn.

RM
Jamie Diamond is predicting that "of course there is a recession ahead". Is he telling you what to do?
Who is Jamie Diamond? Thought it was a dancer that changed their name for professional purposes. When I searched for that name, Jamie Dimon, the CEO of JPM Chase, popped up. Learn something new every day. Of course, I would ignore his advise as well.

RM
I figure the odds be fifty-fifty I just might have something to say. FZ

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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by goodenyou » Wed Oct 16, 2019 6:08 pm

Random Musings wrote:
Wed Oct 16, 2019 4:27 pm
goodenyou wrote:
Tue Oct 15, 2019 10:02 pm
Random Musings wrote:
Tue Oct 15, 2019 9:50 pm
What happens if stocks get crushed more than bonds in the near future. Will it then be the end of the BOA 80/20?

I'll just wait for Goldman Sachs to tell me what to do. If they publish it for public consumption, then the prudent thing is to do the opposite.

Just another form of financial porn.

RM
Jamie Diamond is predicting that "of course there is a recession ahead". Is he telling you what to do?
Who is Jamie Diamond? Thought it was a dancer that changed their name for professional purposes. When I searched for that name, Jamie Dimon, the CEO of JPM Chase, popped up. Learn something new every day. Of course, I would ignore his advise as well.

RM
It was a play on words. But I like the dancer explanation. That was funny :D
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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by nedsaid » Wed Oct 16, 2019 6:13 pm

Random Musings wrote:
Wed Oct 16, 2019 4:27 pm
goodenyou wrote:
Tue Oct 15, 2019 10:02 pm
Random Musings wrote:
Tue Oct 15, 2019 9:50 pm
What happens if stocks get crushed more than bonds in the near future. Will it then be the end of the BOA 80/20?

I'll just wait for Goldman Sachs to tell me what to do. If they publish it for public consumption, then the prudent thing is to do the opposite.

Just another form of financial porn.

RM
Jamie Diamond is predicting that "of course there is a recession ahead". Is he telling you what to do?
Who is Jamie Diamond? Thought it was a dancer that changed their name for professional purposes. When I searched for that name, Jamie Dimon, the CEO of JPM Chase, popped up. Learn something new every day. Of course, I would ignore his advise as well.

RM
Somehow I don't see Jamie Dimon pole dancing. :wink: I think being a CEO pays pretty well.
A fool and his money are good for business.

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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by wubdemil » Wed Oct 16, 2019 6:20 pm

Does anyone have a link to the original report from BofA? I Googled it but couldn't find it. Thanks!

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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by dharrythomas » Wed Oct 16, 2019 6:29 pm

nedsaid wrote:
Tue Oct 15, 2019 11:15 pm
The rumors of the death of the 60/40 balanced portfolio are greatly exaggerated.
+1

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nedsaid
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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by nedsaid » Wed Oct 16, 2019 6:31 pm

dharrythomas wrote:
Wed Oct 16, 2019 6:29 pm
nedsaid wrote:
Tue Oct 15, 2019 11:15 pm
The rumors of the death of the 60/40 balanced portfolio are greatly exaggerated.
+1
Actually, Mr. Bogle said that a 65% stock/35% bond portfolio was a good portfolio for most investors, even retirees. I guess 65/35 is the new 60/40. Bogle made comments that he felt most retirees were invested too conservatively particularly when they take into account Social Security.
A fool and his money are good for business.

TheLaughingCow
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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by TheLaughingCow » Thu Oct 17, 2019 12:36 am

fwellimort wrote:
Tue Oct 15, 2019 8:55 pm
Cubicle wrote:
Tue Oct 15, 2019 8:36 pm
Shilling by BofA. I generally dislike them. High fees, pushy products. Despite their relevance, I don't consider them relevant in terms of a Boglehead.
If you have over $100k in assets and you move those assets to Merrill Lynch, you get access to 5.25% cashback credit card with no annual fee.
What is this credit card called? After some googling I can;t find any mention of it anywhere.

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oldzey
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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by oldzey » Thu Oct 17, 2019 12:47 am

"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman

thebogledude
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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by thebogledude » Thu Oct 17, 2019 12:59 am

Per Buffet:

"He has said that in his will, he offers these instructions for the money left for his wife: "Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard's.)"

fwellimort
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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by fwellimort » Thu Oct 17, 2019 1:04 am

TheLaughingCow wrote:
Thu Oct 17, 2019 12:36 am
What is this credit card called? After some googling I can;t find any mention of it anywhere.
https://www.bankofamerica.com/preferred-rewards/
75% reward bonus on credit card on Bank of America generic cash back credit card for those with assets avging $100k or more within 3 months (you can move your assets to Merrill Lynch and you are fine).
Earn 3% cash back in the category of your choice: gas, online shopping, dining, travel, drug stores, or home improvement/furnishings and 2% cash back at grocery stores and wholesale clubs on the first $2,500 in combined choice category/grocery store/wholesale club purchases each quarter
You choose a category you need: gas, online shopping, dining, travel, drug stores, or home improvement and that becomes 3% * 1.75 = 5.25%
and 2% * 1.75 = 3.5% on grocery/wholesale club

And BoA travel card is 1.5 * 1.75 = 2.75% on everything.

I guess for credit cards if you are wondering:
BoA credit card + BoA travel card for platinum honors, Uber Barclays 4% dining card, Discover 5% or Chase Freedom 5% rotating cashback, US Bank 5% on 2 categories, Chase Amazon 5% for Prime, Target 5% card
Then there's the generic 2% all like Fidelity or Citi 2%
I think those are probably some of the best deals for no annual fee credit cards.

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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by lazydavid » Thu Oct 17, 2019 9:08 am

TomCat96 wrote:
Tue Oct 15, 2019 11:06 pm
If bonds outperform stocks over a three year period, do I get to declare the end of stocks?
It's been Just over 40 years since the most famous declaration of this type, so why not?

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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by Grt2bOutdoors » Thu Oct 17, 2019 9:15 am

nedsaid wrote:
Wed Oct 16, 2019 6:31 pm
dharrythomas wrote:
Wed Oct 16, 2019 6:29 pm
nedsaid wrote:
Tue Oct 15, 2019 11:15 pm
The rumors of the death of the 60/40 balanced portfolio are greatly exaggerated.
+1
Actually, Mr. Bogle said that a 65% stock/35% bond portfolio was a good portfolio for most investors, even retirees. I guess 65/35 is the new 60/40. Bogle made comments that he felt most retirees were invested too conservatively particularly when they take into account Social Security.
Coincidentally, Wellington is a 65/35 portfolio!
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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ps56k
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BOA suggests the end of the 60/40 split

Post by ps56k » Thu Oct 17, 2019 11:04 am

[Merged here — moderator oldcomputerguy]

Interesting article - if you are looking at bonds for various reasons,
are those reasons still valid - short & long term

https://www.marketwatch.com/story/bank- ... 2019-10-15

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CULater
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The 60/40 Portfolio is Dead (Again)

Post by CULater » Thu Oct 17, 2019 3:57 pm

According to the Bank of America
The 60/40 portfolio passed away on October 16, 2019, from complications of low interest rates and a bad case of Fed manipulation. This is the 27th time 60/40 has died in the past decade but enemies market timing, day traders, and alternative investments are hopeful it will stick this time around.
RIP 60/40.

https://awealthofcommonsense.com/2019/1 ... portfolio/
On the internet, nobody knows you're a dog.

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firebirdparts
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Re: The 60/40 Portfolio is Dead (Again)

Post by firebirdparts » Thu Oct 17, 2019 4:28 pm

Here comes the merge dozer.
A fool and your money are soon partners

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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by mighty72 » Thu Oct 17, 2019 4:45 pm

[merged CULater's thread with existing discussion on the same topic]

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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by BionicBillWalsh » Thu Oct 17, 2019 4:55 pm

nedsaid wrote:
Wed Oct 16, 2019 6:31 pm
dharrythomas wrote:
Wed Oct 16, 2019 6:29 pm
nedsaid wrote:
Tue Oct 15, 2019 11:15 pm
The rumors of the death of the 60/40 balanced portfolio are greatly exaggerated.
+1
Actually, Mr. Bogle said that a 65% stock/35% bond portfolio was a good portfolio for most investors, even retirees. I guess 65/35 is the new 60/40. Bogle made comments that he felt most retirees were invested too conservatively particularly when they take into account Social Security.
But himself was 50/50.
Saltwater has an amazing ability to wash away many of life’s troubles

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CULater
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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by CULater » Thu Oct 17, 2019 5:05 pm

I actually prefer 59/41.
On the internet, nobody knows you're a dog.

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Kenkat
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Re: Bank of America declares 'the end of the 60-40' standard portfolio

Post by Kenkat » Thu Oct 17, 2019 6:44 pm

Queue bear market for stocks and bond rally. On three, two, one...

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