Fidelity's Timmer Diversifies Portfolios with 20% Crypto Allocation

Fidelity's Global Macro Director Jurrien Timmer has updated the traditional 60/40 portfolio to a 60/20/20 split, where 60% of assets are in equities, 20% in bonds, and 20% in alternative investments.

According to Timmer, this change occurred after the pandemic and he sees no need to revise it now. The updated model allocates 20% of the portfolio to alternative assets, which include gold, commodities, cash, Bitcoin (BTC), REITs, and managed futures.

Timmer believes that including BTC in the portfolio can help diversify investments as its correlation with the S&P 500 is at 30%, and it has no correlation with US Treasury bonds. This aligns with his earlier analysis using the power law model, which predicted a BTC price of $300K by 2029.

The 60/20/20 split is significant, as it marks a departure from the traditional 60/40 setup that has been in place for decades. Timmer's views on Bitcoin are not new, having previously identified a double bottom pattern in the weekly charts and predicted a potential upside of 24% to $100K if the price surpasses $82K.