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.

Key Takeways

  • 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.

      - Patrick Nolan, BlackRock Strategist

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