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A 'disturbing new all-time low' in the market just flew under the radar as stocks hit record highs a?? and one Wall Street expert warns it implies years of bleak returns for young investors

A 'disturbing new all-time low' in the market just flew under the radar as stocks hit record highs a?? and one Wall Street expert warns it implies years of bleak returns for young investors


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Doug Ramsey, the chief investment officer at The Leuthold Group, points out an inconspicuous market event that coincided with new all-time highs for stocks.




The yield on a traditional 60/40 portfolio is now one-third its historical, 120-year norm, while stocks are trading at elevated multiples.




Ramsey's concerns center on the income-producing portion of a traditional 60/40 portfolio and current stock valuations, which he expects to fall over the next year.




"Those with true multi-generational wealth should probably have little or no exposure to a market trading at nearly 30x Normalized EPS," he said.




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In late August, as stocks were carving out fresh all-time highs, many investors were cheering the market's resiliency. After all, it's not every day that equities recover from a 30 percent-plus, global pandemic-induced, fastest-ever bear market with a vengeance. But while many investors were busy taking a victory lap, Doug Ramsey, the chief investment officer at The Leuthold Group, was stowed away looking for hidden risks a?? and what he found was unnerving. "While others were celebrating new all-time highs in the S&P 500 during August, we were wringing our hands over a disturbing new all-time low," he penned in a recent client note. "Specifically, the yield on the traditional 60/40 U.S.-balanced portfolio plummeted to a tiny 1.37% a?? exactly one-third of its 120-year average of 4.11%."He was referring to a portfolio with 60% allocated to stocks and 40% to bonds, which is considered a standard model investors can use to achieve diversification. Even before this recent milestone of a new low, Bank of America strategists had warned that the 60/40 portfolio "will not survive the 2020s."
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