Many financial advisors are now questioning the relevance of traditional investing strategies that follow the 60/40 stocks-to-bonds mix and long-term, buy-and-hold approaches, a nationwide study by Natixis Global Asset Management showed.
Among the 163 advisors surveyed, 80 percent say their clients are torn between increasing returns and keeping their investments safe.
The wild swings in the stock market generally have scared away many retail investors. For instance, more than $260 billion has been pulled from U.S. equity mutual funds since the end of 2008, while $800 billion has gone into bond funds, based on Investment Company Institute data.
But retirees in urgent need of recovering the colossal losses in their portfolios are left with little choice but to return to equities, especially with the Federal Reserve’s stated intention of keeping rates near zero 'till 2013.
“For people to maintain any form of retirement, they have to assume higher risk profiles,” says Alan Harter, managing director of Pactolus Private Wealth Management, who advises high net- worth families with at least $25 million to invest.
“Realistically, yields are very, very low,” adds Harter. “The only place for them is to have a large portion of their money in high-quality equities.”Page 2 of 6 | Prev Page | Next Page