A Diversified Portfolio May Get More Challenging

February 8, 2017


Dramatic shift possible in equities and bonds resulting in impact on investment in trust assets.

The equity and bond markets have been relatively stable with a negative correlation for the past three decades. However, that may be about to change, according to the Financial Advisor in "Forget 30 Years Of Stock And Bond Divergence, Bernstein Says."

If this shift does occur, trustees will need to pay attention. Trustees are required to invest trust assets by following the prudent investor rule. For the last 30 years, that has meant following modern portfolio theory and diversifying assets between different classes of investment. However, a return to bonds and equities having a positive relationship, will make diversification of investments more difficult.

Trustees' jobs will become much more difficult.

Of course, this shift has not happened yet and might never happen. Most market predictions never come to fruition. However, trustees should pay attention and make sure that they are following the best advice about investing trust assets. Call (443) 470-3599 today and schedule a consultation with Maryland Attorney Britt L. Stouffer to learn more about Estate or Elder Law and how she can help you.

Reference: Wealth Management (Jan. 10, 2017) "Forget 30 Years Of Stock And Bond Divergence, Bernstein Says

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