Rethinking Diversification: New Era of Portfolios, Bonds, and Family Wealth
Volume 40 of Independent Thinking® by Evercore Wealth Management explores the need for investors to reassess traditional portfolio strategies in the wake of historically low bond yields and the economic disruptions caused by the COVID-19 pandemic.
The publication highlights the limitations of the classic 60/40 portfolio and advocates for broader diversification into alternative asset classes, including private markets and credit strategies. It also examines the continued relevance of municipal bonds, despite fiscal pressures on states, and the importance of active management and careful credit analysis in the current environment.
Beyond investment strategy, the issue addresses multigenerational planning, proactive wealth strategies ahead of potential tax increases, and aging challenges for individuals and families.
Independent thinking®
VOLUME 40
Rethinking Diversification: New Era of Portfolios, Bonds, and Family Wealth
Rethinking the 60/40 Portfolio – With bond yields at historic lows, the publication urges investors to diversify beyond the traditional 60% equities and 40% bonds allocation, incorporating alternative assets to better manage risk and return.
The Role of Municipal Bonds – Despite fiscal challenges facing states, municipal bonds remain a valuable component of diversified portfolios, offering relative value, tax advantages, and stability-especially when managed with careful credit analysis.
Expanding Diversification – The journal details the benefits of adding growth, pure, and income diversifiers such as private equity, real estate, and alternative portfolios, aiming to offset the diminished returns of traditional bonds.
Wealth Strategies Ahead of Tax Changes – Proactive planning is encouraged to prepare for potential tax increases, including reviewing asset allocation, estate plans, and gifting strategies to optimize long-term outcomes.
