BlackRock Makes the Case for 20% Alternatives
The traditional stock and bond allocation will not only fall short on returns but actually increase risk, according to BlackRock strategists.
- BlackRock strategist states that advisors should redesign portfolios to look something like 50% stocks, 30% bonds, and 20% alternatives.
- BlackRock suggests that the typical 60/40 portfolio will likely return 4%-6% less than it has over the past 10 years.
- Investors should look towards international equities to diversify the largely U.S. focused equity risk in portfolios.
Given these low yields and low expected return, bonds are not expected to provide the same ballast to portfolios as they have in the past.