Positioning Watch – The 60/40 portfolio in reverse
Happy Saturday, and welcome back to the weekly Positioning Watch, where we crunch through the positioning data and point out the biggest positioning trends in global markets.
- The reverse 60/40 portfolio seems to be THE allocation of the average trader with equity positioning slightly underweight and bond positioning massively overweight. Being underweight equities is not doing any good for your portfolio at the moment, and the long bond trade doesn’t have positive returns in sight if everything that’s unfolding right now continues.
Macro-wise and market-wise we are currently at a big crossroad, as traders and PMs are trying to figure out the state of the global economy, and how central banks are going to respond to recent data releases. Good news has again become bad news and vice versa, and markets seem to have a hard time making up their minds on which direction prices are actually heading. A booming economy with strong growth and waning inflation speaks in favor of a continued bull run, while a more hawkish Fed than feared talks against. No matter what, exciting times are definitely ahead in macro and markets, and it will be crucial to be on the correct side of the trade in all assets. We will try to do that as always in our live portfolio.
Without further ado, let’s jump straight into the data!