This week we hosted a 2020 Review/2021 Outlook with Blaine Rollins, CFA, author of our popular 361 Weekly Research Briefing. We had several interesting questions come in from attendees, so we thought we would use this week’s blog to share Blaine’s responses.

We wrote about the underperformance of multi-factor portfolios at the beginning of 2019, and here we are two years later. And, while much has changed in the world with pandemics, presidents, and top Netflix shows (does anyone even remember Bird Box?), one thing that has stayed consistent is multi-factor investing approaches have delivered disappointing performance.

The ‘K-shaped’ recovery will definitely impact retailers this gift-giving season. Those households with stable employment this year could see very good holiday spending as they draw down their cash accounts which have grown to record sizes because consumers haven’t been able to spend on travel, dining or entertainment in 2020.

Traditional expectations of the 60/40 portfolio may be due for a rethink.

Based on today’s yield levels, bonds simply can’t contribute to a portfolio the way they have historically. For advisors, this could mean shifting assets away from fixed income and into alternatives if they want to preserve the risk/return profile that the 60/40 portfolio has historically delivered.

They say that a fair deal is negotiated when each party walks away a bit disappointed. I think that it’s fair to say that most American voters are a little upset at the current election results because they didn’t get everything they wanted. But given the split decision, we could also say that we did get something that we voted for. While many of us in the investing world had looked at the polling data and prepared ourselves for a blue wave takeover in Washington, D.C., the end result could end up being a better outcome for investors.