Through the first quarter of 2024, many Canadian investors have been shifting to the offensive after sitting on the sidelines last year, according to Vanguard Canada.
Now that interest rates have peaked, she agrees that 60/40 portfolios should serve investors well through different economic outcomes. Long-term investors in 60/40 portfolios now have a higher probability of seeing annualized returns of at least seven per cent over the next 10 years, according to Vanguard’sThis is driven in part by the fixed-income component, with Vanguard projecting an annualized return of 4.3 to 5.3 per cent for Canadian bonds over the next decade.
However, with bonds yielding around six to eight per cent, if you’re willing to take on some credit risk, Tan says 60/40 portfolios can even work for younger investors – especially if they’re saving for major purchases like a car or a home.In addition to having the right asset allocation, constructing a balanced investment portfolio also means being diversified geographically, Tan and Cianfarani say.has returned around 25 per cent over the last five months, for example.
“So, you want to have exposure to that,” Tan said. “At the same time, you don’t want to put all your eggs in that particular basket because it has gotten expensive, and it won’t take much for a re-rating if expectations start being recalibrated.1 Dividend Stock Down 49% to Buy Right Now
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