A conundrum for the conservative investor

Cash is facedown and bonds are off balance — what good are these duds as diversifiers?

Summary: Conservative investors are currently facing disappointing returns from traditionally defensive investments like cash and bonds - it's important to keep in mind returns are affected by broader macro conditions. Meanwhile, in 2015 a Morningstar investment conference saw 90% of attendees tip global and Australian equities as the top performers for the coming year - while fixed income and cash actually delivered top returns. However, standard definitions of growth and defensive investments are now harder to pin down - one option would be to track the progress of an international ETF.

Key take out: Professionals are finding it increasingly difficult to predict returns across asset classes - don't worry if you're finding it puzzling. 

Key beneficiaries: General investors.  Category: Shares.


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