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Chart of the Day: Don't Simply Set and Forget

Crews Bank & Trust Wealth Management Services Feb 1, 2023
Chart shows the ratio of stocks and bonds to receive a 6.5% yield across various years

Contents

Today’s Chart of the Day comes from an article in the Wall Street Journal, “Bonds Over Stocks: The New 60-40 Portfolio.” There are a lot of nuisances in charts like these, and I have to ask, “What type of bonds and stocks do you have to get to this 6.50% yield touted in the article?” This is especially true because a portfolio of all the publicly held stocks and bonds only have a yield of 1.65% and 4.30%, respectively, and when combined with their suggested 40% stocks/60% bonds, it only works out to a yield of 3.25%.

Alas, further research shows their example includes junk and long-term bonds, high-yield low-growth stocks, and private equity into the mix. All of these can add significant risk for an average investor’s portfolio.

The chart does show, however, you cannot simply “set and forget” your allocations due to changing market conditions.
Chart of the Day

About the Author

Crews Bank & Trust Wealth Management Services
Crews Bank & Trust Wealth Management Services

Experienced professionals from our wealth management services team can help you achieve a bright financial future through investment strategies tailored to you. We’ll show you all of the options available and help you choose the ones best suited to you. We’ll provide high-quality, personal service as we work toward your goals together. Our Portfolio Managers do not receive commissions on trades; our recommendations of investments are based solely on your best interests.

Investments are not a deposit or other obligation of, or guaranteed by, the bank, are not FDIC insured, not insured by any federal government agency, and are subject to investment risks, including possible loss of principal.

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