The 60/40 portfolio has long been a staple for retirees, near-retirees and others with a moderate risk tolerance seeking a blend of growth and capital preservation. But 60/40 proponents were tested after 2022 when the Fed’s rapid anti-inflation rate hikes caused a simultaneous bear market in both U.S. equities (-19.4%) and bonds (-13.1%).  Meanwhile, long-term U.S. Treasurys fell by over 29% and corporate bonds lost 15.7%. Some cautious investors are still recovering.

Over the past 150 years, there have been 19 bear markets for stocks, but only three bear markets for bonds. Still, a 60/40 portfolio would have resulted in 11 bear markets during those time periods—defined as negative 20% or more. With 2022 still fresh in many…