If you engage the fixed income market to offset equity market volatility then I think you need to consider different tools to meet that objective and offer a better chance at a positive return. If you engage the fixed income market for the, um, income then I think you need to consider different tools to meet that objective.
The ETF industry is of course very motivated to address these issues whether it is alternative strategies, funds that hedge interest rates and others yet to come.
Where we talked about kicking back with your 60/40 being less likely to get the job done in a recent post investors should be very motivated to adapt along with the market and seek out their own solution.
To be clear, I am not talking about turning 60/40 inside out or trying to create your own endowment style portfolio but seek out ways to bump up the yield in the equity portion of your portfolio and substitute small parts of your fixed income portfolio with alternatives. And again, all fund providers offer tools for these objectives.
The solution is available but it requires an active engagement to find it.
This article was written by AdvisorShares ETF Strategist Roger Nusbaum.