Advantage of Asset Allocation

                    

What do you do when attempting to maintain stock/bond asset allocation relationships in erratic markets?

                       

The early 2009 bear-market in stocks had also been accompanied by a massive sell-off in bonds. The domestic market’s experience had been paralleled overseas as well. That was unusual and not supposed to happen. When stocks in the past were weak, bond prices had generally shown strength.

                       

Therefore asset allocation did not help in that bear market. Using different asset classes to get a high return at a lower risk was unattainable.

                       

Alternatives to conventional stock/bond formulae to balance market fluctuations are not sure-fire answers. But advisers love to recommend a variety with the aid of 20/20 hindsight. (See the Earl J Weinreb NewsHole® comments and @BusinessNewshole at twitter.)