Managing money involves a balancing act that trades off risk against return. This year is proving more challenging, with stocks and bonds swinging about. But it also shows how a return to a more normal level of market volatility might be good news for careful investors.
Usually, the higher potential returns that equities offer versus bonds come at a price: they are more volatile. That is why the classic 60-40 portfolio allocation ratio, with a higher allocation to stocks but a dose of bond ballast, makes a good deal of sense:...