Pension funds are exiting stocks: Here’s why you shouldn’t – Aaron Brown
As interest rates rise and pension funds shift from stocks to bonds, a debate ensues over portfolio allocations. Goldman Sachs predicts a substantial withdrawal from stocks in 2024, fueling the perception that bonds offer a safer haven. However, historical data suggests stocks are vital for growth, and mimicking pension fund strategies may not yield optimal results for individuals. Despite enticing bond yields, caution is urged as inflation-adjusted returns and market dynamics paint a complex picture.
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By Aaron Brown
Rising interest rates and the fear of giving back stock market gains are pushing pension fund managers to move capital from stocks to bonds. Goldman Sachs Group Inc. estimates that funds will pull $325 billion from stocks in 2024 on top of the $191 billion withdrawn in 2023, with some of that going into bonds.
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