Talkin' Shop: Different Market Environments

Eric, CIO of Standpoint, talks about the four economic environments and how the investments that make up a portfolio will perform differently in each of the four ‘quadrants.’ A stock and bond portfolio may do well in a high growth and low inflation period like the 1990s and 2010s but can really struggle during other environments like the 1970s and 2000s. An all-weather approach is a solution to help round out a stock and bond portfolio.

Key Takeways

  • Long only commodities and currencies is not how Standpoint employs an All-Weather approach. There is a right and wrong way of combining multiple asset classes.
  • The proper use of commodities and currencies can help defend against a lost decade and inflation.
  • When the economy is doing well, and the stock market is going up, you need to be comfortable taking the risks necessary to make money during that environment.

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