From Nasdaq:

The 60/40 portfolio is a balanced investment strategy that allocates 60% to equities and 40% to fixed-income securities. This approach offers a balance between growth and stability by capturing upside potential during bullish market phases while acting as a hedge during bearish periods. During past periods of stock market decline, the 60/40 allocation strategy showcased resilience and mitigated overall portfolio losses.

During the 2007-2008 global financial crisis, the 60/40 portfolio fared better than the S&P 500, which plunged by 57%. Investors using the 60/40 allocation lost only 13.3% compared to the S&P’s decline of 36.6%. The approach also worked during the early stages of the COVID pandemic, with the S&P 500 falling by 34% while the 60/40 strategy only lost around seven percent.

In 2022, the 60/40 portfolio faced a significant decline with rising interest rates, leading to a 15% loss in value. This prompted pundits to seek more robust diversification strategies to navigate today’s markets. Despite these challenges, the strategy experienced a resurgence in 2023, yet pundits continued efforts to find a more viable investment approach.

Fortis Portfolio Solutions, a Chicago-based firm, aims to empower advisors with out-of-the-box insights and investment strategies to mitigate risk and achieve long-term growth. The firm’s strategy involves investing in a broader range of assets, including international stocks, real estate, and commodities, while also offering managed futures and bitcoin ETF options. Fortis emphasizes active management and diversification for managing investment portfolios, particularly for those reliant on investment income for their livelihood.

The appeal of the 60/40 portfolio persists, showing enduring resilience and value as a long-term investment strategy. However, the current landscape’s unpredictable market conditions call for refinements to this approach.



Read more: The Rise and Fall (and Rise Again) of the 60/40 Portfolio