The Death of 60/40: Where are we now?

At the beginning of 2022, I wrote a series, “The Death of 60/40.” The thesis was pretty simple. Real yields on bonds were negative, stocks were richly valued by historical measure, and the Fed had unleashed a monetary storm resulting in rising inflation. My conclusion that traditional stock and bond portfolios, especially passive index portfolios,…

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How to Build an All-Weather Portfolio

In my recent series, “The Death of 60/40,” I cautioned investors that traditional asset-allocation strategies that have worked in recent years would begin to fail.  We’re not even three months into the year so far and the classic 60/40 is down more than 10%, on pace for the worst drubbing since the financial crisis of…

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The Death of 60/40: What’s Next?

Welcome to the last of the series “The Death of 60/40.” I have written in this series on how the 60/40 portfolio was justifiably a staple in investor portfolios based upon past performance.  By any measure of financial history, the last four decades were one of the most significant periods of asset growth price ever.…

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The Death of 60/40: Bonds

Welcome back to another week of “The Death of 60/40.” For the last two weeks, I’ve described how stock valuations play a role in defining future expected returns – and how today’s stock market valuations portend a forthcoming era of low returns. “But isn’t the reason we allocate 40% to bonds, is to help offset…

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The Death of 60/40: Starting Valuations Matter… A Lot (Part II)

Welcome to week four of the series The Death of 60/40. Today, we’ll continue to explore stock market valuations and what they portend.  John Bogle, the late, legendary founder of Vanguard Funds used a simple formula to determine future market returns: Future Market Returns = Dividend Yield + Earnings Growth +/- Change in P/E ratio.  …

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The Death of 60/40: Starting Valuations Matter… A Lot (Part I)

Welcome to week three of my series, The Death of 60/40. The 60/40 Strategy is ubiquitous in the investment industry, but will likely fail to deliver future returns that are substantial enough to match most investor needs.    Last week I demonstrated how the historical returns for this strategy have been very dependent on the economic…

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The Death of 60/40: A History

Last week I introduced the idea that the traditional 60/40 Portfolio, a common approach among investors, was no longer going to serve investors as intended in the coming years.  But in order to understand the future, we must first understand the past… Model portfolios that adhere to a specific asset allocation have often been used…

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The Death of 60/40: A Preface

I feel honored to have this opportunity to write for Rowe Wealth Management. I’ve spent over 30 years working in the investment industry and rarely have I found a firm that understands the markets as well as Rowe Wealth does.   The firm’s approach, that of viewing the market through the lens of Relative Strength, sets…

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