What is a 60/40 portfolio?

Diversification is one of the golden rules of investment management. By building a portfolio of different-performing assets, such as alternatives, investors are better able to reduce risk and generate stable, long-run returns. For decades, the 60/40 portfolio of stocks and bonds represented the gold standard for diversification.

Why should you invest in a 60/40 diversified portfolio?

This dynamic means that bonds can provide a shock absorber in the portfolio, helping to cushion overall returns when stocks are falling. Post-pandemic, the dynamics underpinning the “diversified” 60/40 portfolio have changed.

Is the 60/40 Investment Portfolio dead?

Don’t Put Your Eggs in One Basket. That Investing Principle Still Holds. The storm over the so-called 60/40 investment portfolio misses the point, our columnist says. The key issue is diversifying your portfolio, and that is as important as ever. Jeff Sommer writes Strategies, a weekly column on markets, finance and the economy. It isn’t dead.