Is Asset Allocation Dead?
Asset allocation, the practice of spreading a portfolio across different investments to diversify risk, failed miserably in 2008 when almost all asset classes fell together. So is asset allocation dead? Yes, and no.
TIP
Time to Revisit TIPS
One of the side-effects of the recent market tumult is the drop-off in demand for government securities tied to inflation or TIPS.
Case Study: Capital Preservation
George is nearing retirement and doesn’t want a downturn in the market to force him into working for another couple of years. On the other hand, George is worried about inflation and its impact on his standard of living while retired.
Case Study: Hedging Inflation
Max and Erma are well on their towards saving for retirement with a well-diversified portfolio. Although they have taken a hit in the recent bear market, they still have a substantial nest egg and want to protect their investments against any inflation threats that may arise from the massive monetary and fiscal stimulus actions taken by the U.S. and other large economies.
Inflation ETFs – Investor TIPS
With inflation in the news, investors and their advisors are looking for ways to preserve the purchasing power of hard earned capital. One popular investment option is U.S. government issued TIPS.