Understanding the Barbell Investment Strategy: High-Risk & Safe Assets
What Is the Barbell Strategy?
The barbell strategy balances investment risks by focusing on the extremes of high-risk and risk-free stocks and bonds. It ignores medium risk assets. This investment approach is suitable for different investor types, such as aggressive young professionals and cautious retirees. Trader Nassim Nicholas Taleb made successful use of the barbell strategy during the 2007-2008 economic downturn
Key Takeaways
- The barbell strategy focuses on investing in high-risk and no-risk assets, avoiding moderately risky ones.
- Nassim Nicholas Taleb popularized the strategy by mixing hyper-conservative and hyper-aggressive investments.
- In bond investing, the barbell strategy combines short-term and long-term bonds for…
