Rethinking the 60/40 Portfolio: A 60/40 investment strategy is a portfolio allocation method where 60% of the portfolio is invested in stocks and 40% is invested in bonds. The idea behind this strategy is to balance risk and return, as stocks have the potential for higher returns but also higher volatility, while bonds tend to be less volatile but also have lower returns. The 60/40 allocation is considered to be a relatively conservative approach, as it provides some exposure to the potential returns of stocks while also offering a degree of safety through the more stable bond investments.
2022 was a really bad year for the 60/40 portfolio and maybe it’s time to rethink it. Dan Kern, CFA®, CFP®, Managing Director & Chief Investment Officer of TFC Financial Group talks with Robert Powell about rethinking the 60/40 portfolio based on recent events.
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