Displaying items by tag: risk

2021 has posed its fair share of risks to the average portfolio: emerging market disruption, Covid-19 resurgence, slowing economic growth, and rising inflation. However, model portfolios are the solution advisors can utilize to mitigate this risk. Often sought after for their ability for advisors to utilize in order to spend time deepening relationships with clients, a suite of model portfolios have popped up targeted to mitigate risks. For example, EQM Capital launched a variety of modular model portfolios that are risk-based ETFs to better suit clients’ portfolio objectives and preferences.

FINSUM: Model portfolios are expanding and changing in a variety of ways, and this means they can better suit their clients whether that's for their risk level or ESG expansion.

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Strategists for Goldman Sachs, Christian Mueller Glissmann and Peter Openhiemer, say that government bonds are failing to meet the traditional hedging requirements and to consider higher cash and equity allocations. There is still a small negative equity/bond correlation and investors shouldn’t leave the traditional 60/40 split immediately. There are other reasons to allocate more to equity though such as a higher equity risk premia. Inflation is eating away very low yields, making cash a better relative investment, and rate volatility could be even higher in the upcoming Fed cycle. If bonds/equity correlation moves to zero then a balanced portfolio is futile and cash is the safer option.

FINSUM: Investors should need to watch the real return on their fixed income investments and high yield debt might not be worth the risk to generate the ‘normal’ bond returns.

2021 has posed its fair share of risks to the average portfolio: emerging market disruption, Covid-19 resurgence, slowing economic growth, and rising inflation. However, model portfolios are the solution advisors can utilize to mitigate this risk. Often sought after for their ability for advisors to utilize in order to spend time deepening relationships with clients, a suite of model portfolios have popped up targeted to mitigate risks. For example, EQM Capital launched a variety of modular model portfolios that are risk-based ETFs to better suit clients’ portfolio objectives and preferences.

FINSUM: Model portfolios are expanding and changing in a variety of ways, and this means they can better suit their clients whether that's for their risk level or ESG expansion.