What is the flaw in his reasoning and risks to his strategy

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Reference no: EM132040396

Jarvis expects a pickup in US inflation to result in rising rates, causing a steep correction in the stock market. He decides to shift to a “60/40 allocation” with 60% in stocks and 40% in treasury securities, mainly the 10 and 30 US treasury bonds. He reasons that this allocation helped protect investors from the steep market correction in 2008. What is the flaw in his reasoning and risks to his strategy?

Reference no: EM132040396

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