Insights
2021 Investment Outlook: Managing Portfolio Risk During a Period of Equity Highs and Interest Rate Lows
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Insight Article
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March 30, 2021
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March 30, 2021
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2021 Investment Outlook: Managing Portfolio Risk During a Period of Equity Highs and Interest Rate Lows |
As we begin 2021, stocks remain at record highs while interest rates are at all-time lows—clearly this current market environment does not set up well for the traditional 60/40 portfolio. Investors who relied on the long-held assumption of consistently negative correlations between stocks and bonds may, in our view, find it challenging to produce similar results for their portfolios vs. previous years to the extent that markets begin to normalize.
Against this backdrop, we believe that investors interested in new ways to not just create, but also to protect their wealth, may want to consider risk management tools which do not rely solely on the equity vs. rates diversification assumption. Rotation from Delta-1 equity strategies into select structured investment strategies may provide a downside buffer, to the extent markets selloff, and also leverage on the upside, to the extent markets trade sideways.
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Head of the Managed Solutions Group
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Executive Director
Managed Solutions Group
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Vice President
Managed Solutions Group
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