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Rethinking the Classic 60/40 Stock Portfolio
When I started working in capital markets 20 years ago, an investor seeking a “safe haven” could purchase a 30-year Treasury bond yielding better than 5%. The high-quality corporate bonds that I bought for my employer (a major life insurance company) often paid more than 7%.
Times have certainly changed. For much of 2020, 30-year Treasury bonds were paying in the mid-1% range, though they have since climbed to a “lofty” mid-2% level. A corporate bond buyer is lucky to get 4% today for lending money to an investment-grade American company.
Today’s flat bond yields pose a two-fold problem for retirees and those approaching retirement. First, investors buy bonds to generate steady income to fund spending. Second, bonds serve as a means of hedging, or offsetting, the risks associated with stock ownership. That is, when stocks are flagging in a market downdraft, bonds generally tend to do well as investo
The Covid-19 pandemic has reinforced a demand for exclusive-use accommodations from a much wider demographic of travelers and is opening unique opportunities for the travel trade.