Consuelo Mack interviews Cliff Asness of AQR Capital in this episode of WealthTrack. Mr. Asness describes the logic behind “smart beta,” even though he dislikes the name. He also forecasts extremely low return levels for stocks and bonds, and says that valuations for both asset classes are in the 90th percentile, historically.
Despite this, Mr. Asness says a 50/50 allocation between stocks and bonds makes sense, since it’s difficult to time the markets, and both could continue to make new highs. He also recommends an allocation to commodities to guard against a potential spike in inflation.