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The Use For Portfolio Models: Asset Allocation Daily

Feb. 05, 2019 11:56 AM ET1 Comment
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SA For FAs


  • Neuberger Berman: Insurance-linked securities provide diversification from traditional asset classes and attractive risk-adjusted returns.
  • BlackRock argues for a balanced asset allocation, tilted toward equities, especially emerging markets and U.S. stocks.
  • Thought For The Day: For an exercise in investment analysis to be useful, it ought to provide concrete asset allocation advice.

State Of The Bond Market

“The last update on personal consumption, 70% of the entire economy, is for the November 2018 reporting period. We are now in February so the Treasury market, in a sense, has been flying blind as to the direction of the economic data and thus, meandering in a range until conclusive evidence is reported.” (Eric Basmajian)

Insurance-Linked Securities

“Traditionally, natural catastrophe risk has been the domain of the insurance and reinsurance industries. In recent decades, however, the capital markets have begun taking on a greater role in natural catastrophe risk in the form of ILS. We believe ILS provide genuine diversification from traditional asset classes and offer attractive risk-adjusted returns.” (Neuberger Berman)

2019 Outlook

“Our base case: A modest easing of financial conditions globally is likely sufficient to stabilize growth in the second half of 2019. Any decisive move in global monetary and fiscal positions toward a more growth-friendly stance could trigger a renewed bull market, we believe. Yet, we still argue for a carefully balanced investment approach. This includes taking risks where they are being sufficiently rewarded. Cash is less attractive than equities and bonds. Bonds offer slightly higher returns and significantly greater diversification benefits than they did in 2018. We prefer equity over credit, and emerging markets over developed markets outside of the U.S.” (BlackRock)

Thought For The Day

A news blurb on Nasdaq’s site reports that JP Morgan says “a 2020 recession won’t happen.” Well, that’s a relief! I’ve not seen the full JP Morgan analysis. I’ve actually seen some really impressive analysis from them in the past, so I assume it is brimming with insights. But investors’ take home message is usually the headline, and this one was not helpful. I’m sure the JP Morgan analyst was the first to say that 101 things could happen between now and next year that

This article was written by

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GIL WEINREICH - Author of "The Mentor," a unique parable for financial advisors and those who aspire to become one. I have worked in the FA arena since 1997, and during that time, the New York State Society of CPAs twice awarded its prestigious Excellence in Financial Journalism award to me for a monthly column I wrote on business ethics. Previously, I reported on international news for Voice of America (where I was awarded a newsroom writing award) and prior to that worked as an editorial assistant at U.S. News and World Report. I live with my wife and children amidst the verdant and vibrant hills and dales of Jerusalem.

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