‘I’m 100% in equities. … You’re never going to make enough money if you have 40% of your money in bonds,’ says CNBC anchor – MarketWatch


That’s Becky Quick, a news anchor on the business news channel CNBC, explaining Thursday that she’s all but abandoned allocating any portion of her personal investment portfolio to bonds.

Her comment came during a segment on the channel’s morning “Squawk Box” program featuring Andy Sieg, head of Merrill Lynch Wealth Management, where the financial adviser said he is extremely bullish on stocks for the coming year and feared that investors may be missing out on a “generational” rally.

Quick’s commentary, however, is worth noting, coming as the widely held belief that the ideal portfolio mix — 60% in equities and 40% in bonds — has increasingly come into question.

“You’re never going to make enough money if you have 40% of your money in bonds,” Quick said. “I have some cash so that I make sure that I have a cushion so that I’m not locked into it, but I don’t have anything in bonds.”

The CNBC anchor’s confession spotlights not just a bull market that has run almost unceasingly to fresh records for a decade despite entering a period where experts question its longevity on statistical grounds, but also a persistent regime of ultralow and subzero bond rates.

Back in October, Bank of America declared the death of the 60-40 allocation, with a research report titled “The End of 60/40,” written by strategists Derek Harris and Jared Woodard, in which they made the case that “there are good reasons to reconsider the role of bonds in your portfolio,” and to allocate a greater share toward equities.

And it hasn’t been just Merrill Lynch and its parent B. of A. that have been reconsidering the standard 60-40 portfolio construction. A number of wealth managers and large financial firms have been rethinking the ideal mix of assets in recent months, notes MarketWatch’s Chris Matthews.

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One point that has underpinned some of the thinking around portfolio retooling has been a bull market that has taken hold of fixed-income investments. Bond prices rise as yields fall, and currently bonds yields are well below their historical norms, and some fear that the traditional 40% allocation to fixed-income instruments could leave investors vulnerable to a sharp downturn if yields begin a prolonged drift higher. The 10-year Treasury note yield TMUBMUSD10Y, -0.27% stands at 1.902%, compared with a historical average of 4.55%.

Meanwhile, the Dow Jones Industrial Average DJIA, +0.28% , the S&P 500 index SPX, +0.49% and the Nasdaq Composite Index COMP, +0.42% are trading at or near all-time highs.

For his part, Merrill Lynch’s Sieg said his investment breakdown was currently tilted 80%-plus toward stocks.

To be sure, portfolio construction is more a rule of thumb than a standard that must be adhered to, experts say. Market strategists say that an individual’s investment objectives, age and risk tolerance must be considered when building up investment portfolios.

Check out the CNBC segment below: