For almost 1/2 a century, the two asset class 60/40 stock/bond portfolio did an excellent job of providing growth, inflation protection, income and reducing risk. The two asset classes were complimentary to each other for much of this time.
This mix might be 70/30, or it might be 50/50, all dependent on an investor’s risk profile. However, there is a major problem with this model.
The main draw to this strategy is in its simplicity. Most advisors believe that diversification of stocks and bonds is key to reducing portfolio risk and volatility. This view of diversification has seen some changes. Continue reading “Why the Traditional 60/40 Stock / Bond Portfolio is Broken”