60-40 equity-bonds asset mix has taken a beating: Is the strategy no longer good enough?
Synopsis
A constant allocation to debt and equity is a prudent way to reduce portfolio risk, insist experts.
The traditional 60-40 equitybonds mix is seeing a rough ride. While it has previously done a great job of protecting investors against wild market swings, the past year has been sobering. Both equities and bonds have weakened in tandem amid rising inflation and hawkish central bank policy. Is the strategy no longer good enough? For decades, a portfolio comprising 60% stocks and 40% bonds has served as the go-to asset mix for investors. The