Summary of Phil Huber's The Allocator's Edge

Please note: This is a companion version & not the original book. Book Preview:

#1 The 60/40 portfolio, which is a balanced allocation of stocks and bonds, has been working well for investors for over four decades. It is simple and easy to implement, and it has become a perennial favorite among investors.

#2 The 60/40 portfolio has delivered positive returns in 82 percent of rolling one-year periods, 93 percent of rolling three-year periods, and 99 percent of rolling five-year periods. It has only experienced one calendar-year decline greater than 20 percent, but ten calendar-year gains of over 20 percent.

#3 The 60/40 portfolio has been successful because past performance is not always a predictor of future results. However, the conditions that made the 60/40 portfolio so fruitful in the past—namely high and falling interest rates—are no longer present.

#4 The 60/40 portfolio is a drag on returns, and has been for most of the past decade. The Sharpe ratio for both U. S. stocks and bonds over the last ten years is shown in Figure 1. 3.

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Release date

Ebook: 14 June 2022