Per Business Insider
Cash trumps stock-bond portfolios for the first time since 2001
3/3/2023
For the first time since 2001, cash has outperformed having a stock-bond portfolio. This meant that individuals could get more out of cash instead of the regular stock-bond portfolio.
Specifically, the stock-bond portfolio referred to the classic 60/40 of having short-term bonds in the portfolio. Since 2008, the returns of this strategy reportedly resulted in just 2.7%, dropping from its 17% a year before.
Fixed-income assets came back with 5.07%, while six-month US Treasury bills got a high of 5.16%. The 5.07% was reportedly based on the S&P 500's average earnings yield, per Bloomberg.
The Head of BlackRock Investment Institute, Jean Bolvin, gave a statement regarding the increased yields globally. It was noted this came as investors started to find bonds to be more attractive to them.
Bolvin: "Fixed income finally offers 'income' after yields surged globally. This has boosted the allure of bonds after investors were starved for yield for years,"
Morgan Stanley strategists, led by Andrew Sheets, gave a statement regarding how caution is being rewarded during tough times. The statement was given in a note to clients, explaining what the reality of cash holdings and non-participating in markets.
Sheets: “After a 15-year period often defined by the intense cost of holding cash and not participating in markets, hawkish policy is rewarding caution,”
Morgan Stanley's chief US equity strategist Mike Wilson described stocks as being in the "death zone" after climbing too high. He noted that the S&P could drop down to 3,000 points, equaling a whopping 26% slump in value.
While stocks were struggling to perform and cash outperforming the typical stock-bond portfolio, another alternative asset class has reportedly outperformed both stocks and crypto. Luxury watch brands like Rolex, Patek Philippe, and Audemars Piguet had better returns than the S&P 500.
See flow at unusualwhales.com/flow.
Other News:
- Morgan Stanley's Mike Wilson says stocks are now in a 'death zone' after climbing too high
- Top luxury watches outperformed stocks and crypto: Rolex, Patek Philippe, and Audemars Piguet
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