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China’s path out of virus lockdowns (BlackRock, 3 min read) BlackRock sees China’s economy back on-trend growth by late 2020. For this, they are ‘overweight in equities and credit in Asia outside Japan’. They see future US-China decoupling bullish for their portfolio as exposure to both the US and China in the future could provide added diversification benefits.
Do Alternative Investments Dampen Portfolio Volatility? (CFA Blog, 3 min read) Alts do not outperform the 60/40 portfolio and instead of dampening risk actually enhance it by 22%, which is due to their correlation with traditional asset class (bonds and equities) increasing lately.
Why Are Stocks Doing Well? (TheMoneyillusion, 2 min read) Equities valuations are a function of future cash flow discounted at a real interest rate. Expectation of a permanent fall in the equilibrium real interest rate has helped boost valuation. Other factors (albeit less critical) include the hope of a V-shaped recovery and shift of ‘national income from labour to capital’ during the pandemic, making tech companies profitable.