At the recent Morningstar Investment Conference, Bill Gross of Pimco laid out his “Seven Commandments” for investing in the current environment. At the top of the list was this: the policy portfolio (the standard 60% stocks/40% bonds) is dead.
Several of his other commandments stressed the importance of international markets and the dollar. All of these things are a little unfamiliar to domestic investors. We’ve gotten used to having the largest, more liquid, and best equity market in the world. We didn’t need to look anywhere else.
It turns out that this has been a narrow view. Investment management firms from small countries like the Netherlands or Scotland have been evaluating opportunities overseas and investing in them for centuries. Much of the world, in fact, has been explored and settled largely in the search for outside investment opportunities!
What is going to replace the now moribund policy portfolio? I suppose the jury is still out, but I suspect it will be a more global multi-asset portfolio that could bear a striking resemblance to our Systematic RS Global Macro portfolio or to the Arrow DWA Balanced Fund (DWAFX).
Click here to visit ArrowFunds.com for a prospectus & disclosures. Click here for disclosures from Dorsey Wright Money Management.
