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Home > Stock Market > Inflation and rising interest rates have stressed the 60/40 investment portfolio strategy — ‘but it’s not dead,’ says financial advisor

Inflation and rising interest rates have stressed the 60/40 investment portfolio strategy — ‘but it’s not dead,’ says financial advisor


How a 60/40 portfolio strategy works

Market conditions have stressed the 60/40 mix

U.S. stocks have responded by plunging into a bear market, while bonds have also sunk to a degree unseen in many years.

As a result, the 60/40 portfolio is struggling: It was down 17.6% this year through June 22, according to Arnott.

If it holds, that performance would rank only behind two Depression-era downturns, in 1931 and 1937, that saw losses topping 20%, according to an analysis of historical annual 60/40 returns by Ben Carlson, the director of institutional asset management at Ritholtz Wealth Management.

‘There’s still no better alternative’

Investors may need to recalibrate their approach

Diversification ‘is like an insurance policy’



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