No Place To Hide In 2018

There has so far been no place to hide amongst asset classes this year as both stocks and bonds are currently showing negative returns on the year.  Charlie Bilello over at his Pension Partners Twitter feed illustrated this with a nice graphic yesterday showing how most popular allocation strategies are currently in the red.  

As might be expected an aggressive allocation to stocks is showing the worst return so far down 4% as of yesterday.  However, a 60/40 allocation, that is 60% stocks and 40% allocated to fixed assets isn't much better.  It's down 3.5% as of yesterday.  Blame the rapid rise in interest rates this year for the slippage in bonds.  

Note that nothing here suggests that this allocation strategies don't work longer term.  It's simply that in the short run they are being caught up in the issues of the day like everything else.  Not everything works all the time.

*Long ETFs related to the S&P 500 in client accounts, although positions can change at any time    We reserve the right to change these investments without notice on this blog or via any other form of verbal, written or electronic communication.