Wall of worry

As an investment experience, it has hardly been pleasant for the stylised 60/40 portfolio over the last few months.

But it comes after a decade of more or less uninterrupted returns.

The bonds were (relatively) great to have in the GFC and into the pandemic, the stocks were (relatively) great to have in the exit from the pandemic, and the entry into a higher inflation environment. Having both, and tweaking them over time, was even better.

It harkens back to the old words of investing, “no pain, no premium”, or “no risk, no return”. Unless you need the money tomorrow (unlikely for the vast majority of clients, in which case the willingness and ability to tolerate risk would be commensurate with a differently configured portfolio), just keep calm and carry on.

And eventually, as they have for everything the world has ever thrown at them, risky assets will climb the wall of worry.

Important Information: This document has been prepared by Aequitas Investment Partners ABN 92 644 165 266 (“Aequitas”, “our”, “we”), a Corporate Authorised Representative (no. 1284389) of C2 Financial Services, (Australian Financial Services Licensee no. 502171), and is for distribution within Australia to wholesale clients and financial advisers only.

This document is based on information available at the time of publishing, information which we believe is correct and any opinions, conclusions or forecasts are reasonably held or made as at the time of its compilation, but no warranty is made as to its accuracy, reliability or completeness. To the extent permitted by law, neither Aequitas nor any of its affiliates accept liability to any person for loss or damage arising from the use of the information herein.

Please note that past performance is not a reliable indicator of future performance.

General Advice Warning: This document has been prepared without taking into account your objectives, financial situation or needs, and therefore you should consider its appropriateness, having regard to your objectives, financial situation and needs. Before making any decision about whether to acquire a financial product, you should obtain and read the relevant Product Disclosure Statement (PDS) or Investor Directed Portfolio Service Guide (IDPS Guide) and consider talking to a financial adviser.

Taxation warning: Any taxation considerations are general and based on present taxation laws and may be subject to change. Aequitas is not a registered tax (financial) adviser under the Tax Agent Services Act 2009 and investors should seek tax advice from a registered tax agent or a registered tax (financial) adviser if they intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that arise, or could arise, under a taxation law.

Receive our investment insights

Something went wrong. Please check your entries and try again.