Mohamed El-Erian, Allianz (ETR:ALVG)'s chief economic adviser and former Pimco CEO, has expressed unease about investing in volatile equity and bond markets due to central banks' anti-inflation efforts. During his appearance on the FT's Money Clinic podcast on Tuesday, El-Erian discussed his personal portfolio strategy, which involves a balance of low-risk cash assets and high-risk distressed investments.
El-Erian uses a "barbell approach" to manage his investments, balancing low-risk cash assets offering 4-5% interest with high-risk distressed investments in private credit. However, he cautioned that this complex strategy may not be suitable for novice investors.
In anticipation of a return to traditional correlations and risk mitigation strategies, El-Erian has increased his equity investments. He underscored the importance of resilience, optionality, and agility as key competencies for investors, CEOs, and governments. These concepts are further explored in his co-authored book "Permacrisis: A plan to fix a fractured world".
El-Erian's earliest financial experience was playing blackjack games with his uncle in Egypt. His journey from childhood games to becoming a key figure in global economics illustrates the diverse range of experiences that can shape an individual's approach to financial management.
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