03 May Research Affiliates: It’s Time to Show Traditional Stocks and Bonds the Door
According to Chris Brightman, CEO and chief investment officer at Research Affiliates, the U.S. economy is probably heading toward stagflation. This means that the capital markets are likely to behave as they did in the early 1980s, when soaring inflation and recession simultaneously dominated the economy.
“If I’m correct, investors will wish to reposition portfolios to protect the real value of their financial capital,” Brightman wrote in a blog post. “They [can] reduce exposure to equity beta and nominal duration by selling mainstream stocks and bonds in favor of commodities and real assets, whose prices have historically risen in response to rising inflation.”
Published in Institutional Investor.