November 16, 2014
By Ed McCarthy
CMG CEO Steve Blumenthal spoke to InvestmentNews about an alternative to the traditional 60/40 buy and hold stock/bond portfolio. Blumenthal favors a tactical portfolio comprised of 30% equity, 30% fixed income that reduces equity and fixed income exposure and adds exposure to tactical investment strategies creating a 30/30/40 portfolio.
Excerpt from the story:
“The argument for 60/40 is that it can provide diversification, downside protection, upside participation and income. Achieving those results now requires adopting more flexible strategies, particularly liquid alternatives, said Steve Blumenthal, chief executive of Capital Management Group Inc.
A portfolio that Mr. Blumenthal calls the new 60/40 would include 30% equities (usually hedged with options); 30% fixed income, using flexible-strategy exchange-traded funds; and 40% of what he describes as liquid, tactical funds.
Mr. Blumenthal uses a price momentum strategy with the alternatives and shifts funds to assets showing the strongest price momentum. That discipline is a better way for advisers “to tackle the environment,” he said.”
Read the full story in InvestmentNews: Investment Managers ditching 60/40 portfolios in favor of more liquid alternatives