The Securities Litigation Expert Blog

Will the 60/40 Allocation Make It Through the Next Cycle?

Posted by Jack Duval

May 19, 2013 4:49:07 PM

Interesting article in the WSJ about how both bonds and stocks have benefited from declining interests rates over the past thirty years.  (WSJ)  This has lead a lot of advisors to use a 60/40 (stocks/bonds) mix.  If interest rates were to back up for a sustained period, both bonds and stocks would suffer at the same time.

These are more dangerous times than many investors realize. Far from holding a (60/40) portfolio which is protected in all environments, they are basically betting on a steady boom with rising prosperity and no inflation—a best-case, and rare, scenario.

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Topics: 60/40 mix, investments, Asset Allocation

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