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Just got through watching Abbey Joseph Cohen from Goldman Sachs on the PBS
Wall Street Week. When Louis R. asked her about asset allocation for year
2000, she stated that for their institutional investors they (Goldman Sachs)
are recommending 70% equities, 27% bonds and 3% COMMODITIES!!! She
justified the 3% by stating that they expect commodities to show good growth
along with the economy and the stock markets. She also commented that bonds
should pick up and the foreign markets should pick up too.
My point is really the slow shift to the realization by portfolio managers
that commodities should be represented (albeit small) in their holdings. As
a Financial Advisor, who speculates in the futures markets on the side, I
noted this was reflected in the recent issue of "Financial Planning
Magazine." The article "Toes in the Water" stated that few financial
advisors are willing to plunge into managed futures, but more and more are
willing to test the waters. In the body of the article it appears that
institutional investors and high net worth investors are comfortable to take
a small position in managed futures. This may very be the new portfolio
paradigm; equities, bonds, money market, real estate and futures for a
balanced asset allocation. Remember when the advice was to have a small
position in gold or other "hard" assets?
If the technology and Internet sectors cool sometime in the future, new era
investors hooked on double and triple gains may push into futures and
managed futures for satisfaction. It will be interesting to see if this
plays out.
Marlowe Cassetti
Colorado Springs, CO
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