{"id":1252,"date":"2023-01-10T00:22:55","date_gmt":"2023-01-10T00:22:55","guid":{"rendered":"https:\/\/twiangulate.com\/blogwp\/?p=1252"},"modified":"2023-01-18T15:25:28","modified_gmt":"2023-01-18T15:25:28","slug":"how-common-actually-is-common-knowledge","status":"publish","type":"post","link":"https:\/\/twiangulate.com\/blog\/how-common-actually-is-common-knowledge\/","title":{"rendered":"How common, actually, is common knowledge?"},"content":{"rendered":"

An old friend observed that Zoltan Pozar’s recent claim<\/a> that “60\/40 won\u2019t cut it anymore and should be 20\/40\/20\/20 instead” is spurious.<\/p>\n

Nobody believes in 60\/40 anymore, he said.<\/p>\n

I wondered: while the idea that investors should balance their portfolios 60% equities and 40% bonds certainly took a beating in 2022\u2014”is the 60\/40 dead<\/a>? Goldman asked\u2014is it true that “nobody believes” in 60\/40?<\/p>\n

I decided to Google and asked “how many people use 60\/40 for equities to bonds?” <\/span><\/p>\n

Google wouldn’t tell me how common the strategy is, BUT search results suggest that “everyone” (at least Morgan Stanley, Barrons and BlackRock) agrees that 60\/40 is “classic,” “traditional,” or “foundational.”\u00a0<\/span><\/p>\n

The Goldman report observes unhelpfully, “although most investors typically don\u2019t hold such a simplistic portfolio, we see shades of the classic 60\/40 present in many portfolios due to an overconcentration in the most familiar asset classes.” Shades present in many portfolios<\/em>… thanks Goldman!<\/p>\n

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So who knows how many investors use the strategy?\u00a0 (Googling “how many investors weight their portfolios 60\/40 equities to bonds?” doesn’t yield any more concrete or specific answers.)<\/span><\/p>\n

So we really don’t have any idea how common this common strategy actually is.<\/p>\n

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The difficulty of answering the question “how common is a given nugget of common knowledge” is\u00a0constant in markets. Who knows what and how well is that information discounted by prices?<\/div>\n
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People keep telling me “everyone is bearish”.<\/p>\n

I don’t really care how they feel.<\/p>\n

Tell me how they’re positioned…<\/p>\n

\u2014 Markets & Mayhem (@Mayhem4Markets) January 9, 2023<\/a><\/p><\/blockquote>\n