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R.I.P. 60-40 PORTFOLIO
Kiplinger's Personal Finance
|December 2020
The old standby allocation of 60% stocks and 40% government bonds might not work for buy-and-hold investors anymore.
Jared Woodard is head of the Research Investment Committee at BofA Securities.
What is the 60-40 portfolio, and why has it been the go-to model for many investors? In a 60-40 portfolio, 60% of assets are invested in stocks and 40% in bonds—often government bonds. The reason it has been popular over the years is that traditionally, in a bear market, the government bond portion of a portfolio has functioned as insurance by providing income to cushion stock losses. In addition, bonds tend to rise in price as stock prices fall.
This story is from the December 2020 edition of Kiplinger's Personal Finance.
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