Vanguard is suggesting a new approach to investing by flipping the traditional 60-40 rule to a 40-60 rule, favoring more bonds over stocks due to concerns of overvalued U.S. stocks. The S&P 500 has seen a 216% rise over the last decade, prompting experts to reevaluate the traditional investment strategy.

With forecasts of meager returns for stocks, Vanguard predicts annual gains of 3.5%-5.5% for U.S. stocks and 3.8%-4.8% for U.S. bonds over the next decade. The 40-60 portfolio aims to provide similar returns as a 60-40 portfolio while reducing volatility, especially for investors with shorter-term financial goals.

Vanguard’s 40-60 portfolio mix includes 36% U.S. bonds, 24% international bonds, and various categories of stocks expected to perform well in the future, such as value stocks, small-cap stocks, and non-U.S. stocks. This strategic shift reflects concerns over the overvaluation of certain tech giants in the market.

While the idea of increasing bond allocations may seem unattractive to some investors, the 40-60 principle is meant to be a concept rather than a strict rule. Investors have the flexibility to adjust their portfolio allocations based on their risk tolerance and financial goals, potentially leading to more stable returns in the long run.

Read more at Yahoo Finance: Here’s why an investment giant wants to turn the 60/40 rule on its ear