Search
Get in touch!
Linkedin X-twitter Envelope

Howard Marks: Reassess your bond and equity weighting

Howard Marks, Oaktree Capital Management Co-Chairman, recently attended the HKMA Global Financial Leaders’ Investment Summit, where he discussed the balance between investing in credit and equities with Bloomberg’s David Ingles.

For an individual investor, this means investing in government, mortgage and corporate bonds on the one hand and listed companies on the other. In this split, Marks today sees completely different opportunities to get a return on par with the equity market, i.e. 8-10% per year. Even with a large allocation towards bonds:

 

Right now, it looks like you can get equity type returns from credit. A little below ten for what we call liquid credit, stuff that’s tradable every day, and well above ten perhaps for private credit, which is not tradable. […]

So the question is, how do you and your organization feel about that trade off? If I say to you I think I can get you 9 to 10% through a balanced portfolio of credit, over the long term quite dependably. If you say that’s great, I love that, maybe you do 75% of your portfolio.

If you say I want to still make sure that I have exposure to the upside of equities, then you say maybe 50 or 40.

Click here to go to the external source.

Share the news

Disclaimer of liability

The above has been prepared by Børsgade ApS for information purposes and cannot be regarded as a solicitation or recommendation to buy or sell any security. Nor can the information etc. be regarded as recommendations or advice of a legal, accounting or tax nature. Børsgade cannot be held liable for losses caused by customers’/users’ actions – or lack thereof – based on the information in the above. We have made every effort to ensure that the information in the above is complete and accurate, but cannot guarantee this and accept no liability for errors or omissions.

Readers are advised that investing may involve a risk of loss that cannot be determined in advance, and that past performance and price development cannot be used as a reliable indicator of future performance and price development. For further information please contact info@borsgade.dk

You might also find this interesting:

Karen Karniol-Tambour: Today’s Radically Different Market Environment

May 13, 2025

In this Bridgewater Associates interview, Co-CIO Karen Karniol-Tambour discusses the firm’s latest outlook on the global economy, the investment landscape, and the urgent threats facing portfolios. The conversation centers on the shift to a new era of “modern mercantilism,” the implications for US assets and the dollar, the rising risk of recession, and the role of technological disruption, particularly artificial intelligence (AI).

Warren Buffett: Its Time To Pass The Torch

May 13, 2025

Warren Buffett, legendary investor and longtime leader of Berkshire Hathaway, has announced he will step down as CEO at the end of the year, with Greg Abel set to succeed him. Buffett, who will remain as chairman, made this announcement in a surprise move at the conclusion of the Berkshire Hathaway annual shareholders meeting, marking a significant transition for the company he has shaped for decades.

Counterpoint Global: Investing in Second-Order Effects of AI

May 13, 2025

Artificial intelligence (AI) and automation are rapidly transforming the business landscape, with profound implications for companies, workers, and investors. In their April 2025 report, Morgan Stanley’s Counterpoint Global explores how the adoption of these technologies is driving efficiency, reshaping workforces, and creating new investment opportunities-especially through “second-order effects.”

Aswath Damodaran: Dangers of Contrarian Investing

May 6, 2025

In his recent blog post NYU professor Aswath Damodaran examines the popular investment advice to “buy the dip” – that is, to purchase stocks or markets after sharp declines. He explores the various forms of contrarian investing, the historical evidence supporting and challenging these strategies, and the psychological demands required to succeed as a contrarian investor. Aswath urges investors to approach contrarian strategies with caution, discipline, and self-awareness, rather than simply following the crowd or relying on historical averages.