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The 60/40 Portfolio Isn't Doing Its Job. It May Be Time to Ditch Bonds.


Published on 2025-01-10 18:01:25 - MSN
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  • A surge in bond yields on Friday highlighted the volatility that has characterized fixed income in recent years and has caused some investors to question the stability of the popular 60/40 asset mix.

The article from MSN discusses the traditional 60/40 investment portfolio, which allocates 60% to stocks and 40% to bonds, and its recent underperformance. It highlights that this strategy, once considered a balanced approach to risk and return, has not been effective in the current economic environment characterized by high inflation, rising interest rates, and market volatility. Bonds, traditionally seen as a safe haven, have not provided the expected stability or returns due to these conditions. The article suggests that investors might need to reconsider their asset allocation, potentially reducing their bond holdings or diversifying into other assets like commodities, real estate, or even cryptocurrencies to hedge against inflation and market fluctuations. It also mentions the exploration of alternative strategies like increasing exposure to equities, using dynamic asset allocation, or incorporating more tactical asset management to adapt to the changing financial landscape.

Read the Full MSN Article at:
[ https://www.msn.com/en-us/money/savingandinvesting/the-60-40-portfolio-isn-t-doing-its-job-it-may-be-time-to-ditch-bonds/ar-BB1reF2E ]