Best Portfolio Asset Allocation | Britannica Money
Finding the right mix for your portfolio.
© Lynne Ann Mitchell/stock.adobe.com
One of the first things you learn as a new investor is to seek the best portfolio mix. Many financial advisors recommend a 60/40 asset allocation between stocks and fixed income to take advantage of growth while keeping up your defenses.
Here’s how 60/40 is supposed to work:
- In a good year on Wall Street, the 60% of your portfolio in stocks provides strong growth.
- In a down year, having 40% of your portfolio in fixed-income assets like bonds protects at least some of your stash from Wall Street’s worst losses, because bonds usually, but not always, do better than stocks in tough times.
Like a lot of things, that began to change during and after the COVID-19…
