Asset Allocation Exercise

The picture in the header is what the sunrise looked like on Sunday as we started our hike. Pretty epic.

A reader nudged me the other day about why I've been writing less lately. The answer can be summed up by a sarcastic Tweet from Barron's columnist Steve Sears who said "America, 2020. Investment risk died. RIP" in response to a low reading on the VIX. The story on the ground is miserable bordering on dire but the stock market has managed to steadily move from the lower left to the upper right (paraphrasing Dennis Gartman who is fond of that description for something going up in price). The vast majority of economic data points have had and are likely to keep having lousy reports except for stock prices which are an economic indicator of sorts.

I can't recall such a disconnect. To the extent "risk happens fast" (Mark Yusko) clients are hedged a bit but have been riding the market higher so I am not calling a bubble because I've missed the move, I haven't, even if performance has lagged. As an advisor, it is crucial to preserve clients' reasonable portfolio income needs which is why I hedge a little, and for clients still in the accumulation phase it is important that some bad market event doesn't scare them away from markets as happened with people after the Great Depression.

So if the market just goes up almost every day regardless of the story on the ground then maybe blog posts chronicling that sort of environment don't add a lot of value.

To the main point of today's post, @sairarahman Tweeted "You can’t put money into Bitcoin or the stock market. What’s your next choice?" I find this to be a fascinating thing to ponder. With enough time devoted to the question, it might cause you to think about and maybe even improve your process for asset allocation. I threw my hat in the ring with

  • real estate
  • gold
  • TIPS
  • a little Ethereum
  • a few Swiss francs
  • Aussie & NZ sovereign debt
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Disclaimer: The information, statements, views, and opinions included in this publication are based on sources (both internal and external sources) considered to be reliable, but no ...

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