TY - JOUR T1 - Should the Interest Rate Level Influence Asset Allocation? JF - The Journal of Investing SP - 116 LP - 125 DO - 10.3905/joi.2018.1.069 VL - 27 IS - 2 AU - Gerald Garvey AU - Konark Saxena Y1 - 2018/05/31 UR - https://pm-research.com/content/27/2/116.abstract N2 - How does the interest rate environment inform the allocation between risky and safe assets? The authors focus on the level rather than change in rates because rates are highly persistent; changes are infrequent and unpredictable while low versus high rate regimes are durable. U.S. history from 1926 through 2016 shows that equities have lower risk and higher excess returns when rates are low. Despite all the concern about low yield, a low rates environment is actually a good thing for more-aggressive investors.TOPICS: Legal/regulatory/public policy, portfolio construction ER -