Is the Traditional 60/40 Balanced Portfolio a Good Investment Strategy?
For decades, the 60/40 portfolio was the epitome of the balanced portfolio. The allocation of 60% stocks and 40% bonds has traditionally been seen as an all-weather portfolio, with the volatility of stocks balanced by the more conservative, defensive nature of bonds.
And, historically speaking, this has generally been the case. According to Emelia Fredlick, a senior editor for Morningstar, there has been only one time in the past 150 years that the 60/40 portfolio experienced more pain than the stock market — and it’s now.
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So why is that the case? Does it mean the era of the 60/40 portfolio…
