What is a barbell strategy?

When applied to fixed income investing, the barbell strategy advises pairing short term bonds with long-term bonds. The result gives the investor a cushion of long-term bonds in case yields fall, and a chance to do better if short-term yields rise. In practice, the barbell strategy is more frequently applied to bond portfolios.

Can a barbell strategy mix stocks and bonds?

The barbell strategy can also mix stocks and bonds. There are several risks associated with using a barbell strategy, such as interest rate risk and inflation risk. The barbell strategy will have a portfolio consisting of short-term bonds and long-term bonds, with no intermediate bonds.

What is a barbell strategy influenced investment portfolio?

Barbell strategy-influenced investment portfolios can be made up of only stocks, only bonds or a combination of both asset classes along with alternative investments like Gold. The barbell approach is a flexible one. Investors can tailor the strategy to suit their respective investment goals, risk appetite and time horizon.

What is Taleb’s barbell strategy for managing risk?

Barbell Strategy: a method that consists of taking both a defensive attitude and an excessively aggressive one at the same time, by protecting assets from all sources of uncertainty while allocating a small portion for high-risk strategies. A rendering of Taleb’s “Barbell Strategy” for managing risk.