The 60/40 Portfolio Is Muzzling Critics With Another Big Year
- Balanced portfolio of stocks, bonds performed well in 2020
- Critics have long been calling for the demise of the strategy
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A balanced portfolio of stocks and bonds for decades was among the few venerated precepts in investing. Yet doubts about the approach grew after the pandemic hit and turned 2020 into a year like no other.
But for all the handwringing, in reality it looks like it will be another year of solid performance for 60/40. A model portfolio composed of 60% U.S. stocks and 40% bonds has climbed 13% year-to-date, according to a Bloomberg index. That’s in line with the rally in the S&P 500 Total Return Index and bigger than the 3.5% gain in the HFRX Global Hedge Fund Index.