00:00So it's a good time to be a saver once again, and if you have a traditional pension plan,
00:03it's also good. But with higher yields, do we now say, okay, the 60-40 portfolio,
00:08oh, that works again. So you're really spot on to highlight both sides of this, right? The
00:14liability side, the mortgages, that's a little painful, but the opportunity side on the investment
00:19side is better. I don't think you can conclude 60-40 is back because there's another whole issue
00:24with bonds, which is how do they perform with equities? What's the relationship? And that
00:30relationship used to be very powerfully diversifying. We had an environment where bonds
00:34would reliably go up whenever there was a challenge to equities. That was an environment when we had
00:40too little inflation. So that's over. We're five years into too much inflation. When you have too
00:45much inflation, bonds aren't really a hedge anymore. They're good for income, as you pointed out, and
00:49that's the way to think about them. But for diversification, we're going to have to think
00:54about broadening our diversifier set away from just thinking about the traditional 60-40. We
00:59talk about it 50-30-20. And so what's that 20? It's alternatives and different forms of diversification
01:05to add into the portfolio mix.
Comments