Is The 60/40 Portfolio Really Dead?

After 31 years of investing, here’s the most important thing I’ve learned: nobody can predict the future. Unfortunately, there’s no shortage of fortune-tellers. They claim to predict where stocks, bonds, gold, currencies or oil prices are going next. If I listened to those predictions, I might be broke today.

If you’ve been investing for a few decades, and your memory is long, you’ll know what I’m talking about. Almost every week of every year, money-related headlines will grab your heart and squeeze it. They always sound convincing. And when they build momentum, they spread faster than a high school rumor.

One such report came from the Bank of America/Merrill Lynch in October 2019 titled, “The End of 60/40.” It said the classic allocation of 60 percent stocks and 40 percent bonds shouldn’t be used anymore. It referenced ever-lowering bond yields that will hurt the performance of such portfolios. Several publications have jumped on this bandwagon, evoking further fear.

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Andrew Hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School and Millionaire Expat: How To Build Wealth Living Overseas. My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I'm happy to comment on your questions.

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