What was the real return on the US ten-year bond over the past two years? Flat? Down a little?
Wrong – down a lot. The bedrock of the balanced portfolio has delivered a real return of -20% over the past two years .
That’s the worst inflation-adjusted performance since 1981 .
Traditional balanced portfolios rely on equities and bonds fulfilling their roles – equities for good times, bonds to cushion the bad. But after a torrid three months for markets, investors are being forced to tear up the rulebook.