Investors could continue to see “pain” in the markets before the "Big Low" is reached in 2023, according to Bank of America.
Strategists at the bank wrote in a note on Friday that Thursday’s huge turnaround and jump in equities was a “bear hug,” calling it a “decent counter-rally, but ultimate lows ain’t seen yet.”
They also noted that those who followed the traditional 60/40 portfolio rule have seen their annualized returns sink 34.4% this year, the worst in a century.
Instead of allocating 60% broadly to stocks and 40% to bonds, many professionals now advocate for different weights and greater diversification.
However, the strategists added that even the more defensive “permanent portfolio” of 25% each in cash, commodities, stocks, and bonds dipped 11.9%, the most since 2008.