last I checked doesn't blackrock manage the TSP funds? they are getting paid millions so why don't they send us TSP members/owners reports instead of just to barrons?
Rick Rieder, chief investment officer of BlackRock's $2.4 trillion global fixed-income group and co-manager of the BlackRock Strategic Income Opportunities Portfolio (BASIX), knows that investors can no longer trust the traditional approach. As he recently told
Barron's...
If you are holding the same portfolio as two years ago and expect it to do the same, it won't. You have to restructure how you think about asset allocation, especially fixed income.
Ben Inker, head of asset allocation for prominent money manager GMO, concurs. In the firm's second-quarter letter to its clients last year, Inker noted that...
All portfolios that include government bonds have both lower expected returns and higher risk than anyone had a right to expect them to have previously.
So with the old playbook becoming obsolete, what should investors do now?
Back in October, living legend Howard Marks published a valuable essay called "Coming Into Focus." In it, Marks reasoned that the Federal Reserve's insistence on keeping interest rates near zero for the foreseeable future leaves investors like us with five less-than-ideal options...
- Invest as you always have (meaning 40% in bonds) and settle for today's low returns
- Reduce risk in the face of today's uncertainty and accept even-lower returns
- Go to cash at a near-zero return and wait for a better environment
- Increase risk in pursuit of higher returns
- Put more into special niches and special investment managers
For most investors, settling for lower returns or going entirely to cash – when the Fed has made it abundantly clear that near-zero rates will be the norm for years – simply makes no sense. That means the fourth and fifth items on the list are your only real options today.