Immigration could offset labor shortages in the very short term. Of course, your view of labor shortages likely depends in large part on whether you're capital or labor.That inflationary bump could be a decade long before the effects of automation get good enough to offset labor shortages.As a bit of a macro guy, one problem with the assumption that rates are going to be higher for longer is that we may be in long-term structural disinflation .. Japan may be ahead of the curve in terms of debt, demographic trends (lower birthrates), more automation (presumably disinflationary) – now we're on the verge of an AI revolution, which again may put downward pressure on incomes, improve productivity, reduce the need for work, etc.I've appreciated the comments.
I suppose what I really meant in the post title is "the death of setting 60/40 and leaving it". I suppose almost all here would still disagree with me. what makes a market.
my point is that while the simplicity of a set it and leave it policy makes sense for some, and makes sense for many when we have had a massive secular decline in interest rates, which rewarded equities and bonds, going forward, I think the context will be different...and so one's thinking should be different
as for my 70 ST treasuries/30 equities allocation (we are 70 yo, and we have enough, though more would be nice), it suits me fine until I think LT rates have peaked, and I dont think we are there yet. then I will lengthen my FI maturities and add to equities (which should not have benefitted that much in the interim from rising interest rates).
could be wrong. but setting it and leaving it because I am afraid I might be wrong is not the way I live my life. again, for y'all who have made major changes in your life but insist on leaving your AA alone, why is it exactly?
So the Cathie Woods of the world think this has been an inflationary bump in the road. We knew there'd be supply-side disruption as we came out of covid. The Ukraine situation. And so far, it's played out. I think 70:30 ST treasuries/equities makes sense for 70 y/o anyway. But as economist rate path forecasts demonstrate: no one's any good at forecasting rates or inflation. A good portfolio should allow for movement either way. I think 70% ST Treasuries makes a lot of sense. It makes sense to add duration as value becomes better. Even Bogle said he'd adjust his asset allocation at extremes of value – 3 times in one's lifetime when things are too cheap, and 3 times when they're too expensive. I think bonds have been a clear example of too expensive for most of the past decade.
We're a long way away from having robotic health care workers and robotic housing construction.
Statistics: Posted by exodusing — Mon Apr 22, 2024 5:34 pm — Replies 125 — Views 8326
