Cash & Bond Allocations Are Near Dangerously Low Levels
Investor allocations to cash and bonds are approaching levels that deserve attention.
The risk is twofold:
1️⃣ Market risk
Extremely low cash and bond allocations can be a late-cycle warning sign, when investors are heavily positioned and markets may be more vulnerable to a reversal.
2️⃣ Portfolio risk
Investors may be underprepared for a drawdown, with too little defensive exposure if markets turn lower.
But there’s a bigger question.
Most investors are positioned for a repeat of the 1970s. Far fewer are prepared for a repeat of the 1920s. And fewer still are considering a third possibility.
What if neither scenario plays out?
What if yields simply gyrate within a new, higher range?
Markets don’t have to repeat history exactly. The real risk may be assuming they will.
Markets are always moving - and sometimes, the best move is knowing what works for you.
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Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
