BlackRock CEO Advises Going (Almost) All-In on Stocks

While financial advisors' consensus continues to recommend building '60/40' stock and bond portfolios, consisting of 60% stocks and 40% bonds, Larry Fink, CEO of BlackRock (NYSE:BLK), believes that long-term investors should allocate a significant portion of their portfolios to stocks and other real assets.

Speaking in a recent interview with CNBC, the CEO of the world's largest asset manager extolled the virtues of stocks and other assets like real estate and infrastructure as sound long-term investments.

He also highlighted several factors that make stocks more appealing for the long term than in the past, including opportunities in artificial intelligence, robotics, and companies engaging in nearshoring, moving operations to neighboring countries.

Fink justified his advice for a heavier weighting in stocks by noting that investors are likely to live longer than before due to medical advancements, necessitating extended financial support. Therefore, Fink explained it makes sense for them to tolerate more risk by investing in stocks over an extended period.

"For a long-term investor with a long-term view who can tolerate market volatility, you need at least 80% in stocks or real assets," Fink stated.

The manager even suggested that investors with an exceptionally high tolerance for volatility could allocate 90% or 100% of their portfolios to stocks.

"One needs to have a 10 or 20-year perspective," Fink added, seeing himself as an optimistic individual who believes that "in 10 years, in 20 years, humanity will be in a better position than today."

On the contrary, he warned that bonds may face greater long-term challenges if interest rates remain elevated for an extended period, with BlackRock analysts cautioning this week that the yield on the 10-year U.S. Treasury could surpass 5%.

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