On June 1, 2019, a new method I've been analyzing recommended rotating out of stocks and into bonds, in both tax-sheltered and taxable accounts, except for low-volatility stocks. The method was developed from 100 years of historical data for US stocks, treasury bonds, and inflation; 25 years of data for international stocks, bonds, and inflation; and 25 years of indexes for minimum volatility stocks worldwide. Here's a chart that illustrates how the method would have performed since 1919 in the US. ... To see the chart and read the rest of this post, go to my new website: https://likelyso.com/why-rotate
Accurately measuring whether stocks are over- or under-valued is hard enough. Yet even if that problem were solved, others would remain. An indicator that predicts a big change in stock prices over the near term is likely to have a wild margin of error. Longer term, the error-rate may decline, leading to a safer, more confident prediction, but the price-change will also fade to a smaller size. Is there any way to have it all: calculate a credible benefit, capture it safely, and bank it soon? |