Is the traditional portfolio allocation strategy making a comeback?

  • The 60/40 portfolio gained 9.6% in November, its best monthly performance since December 1991
  • The portfolio had a crushing 2022 with both stocks and bonds tumbling
  • The traditional thinking behind the 60/40 portfolio has been challenged in the last decade
  • Wall Street remains cautious about going all in on the 60/40 portfolio
  • Bonds now have the potential to offer more than just downside protection
  • Some experts suggest skipping bonds entirely for wealth-building purposes

The much maligned 60/40 portfolio showed signs of life in November, gaining 9.6% and achieving its best monthly performance since December 1991. However, Wall Street remains cautious about fully embracing this allocation strategy. The traditional thinking behind the 60/40 portfolio, which allocates 60% to stocks and 40% to bonds, has been challenged in recent years. Stocks have outperformed thanks to easy money policies, while bonds have provided little yield. Even with November’s outperformance, experts are still hesitant to go all in on the 60/40 portfolio. Bonds now have the potential to offer more than just downside protection, but some suggest skipping bonds entirely for wealth-building purposes. It remains to be seen if the 60/40 portfolio is making a true comeback.

Public Companies: BofA Securities (N/A)
Private Companies: Bespoke Investment Group, RWA Wealth Partners
Key People: Paul Hickey (Co-founder of Bespoke Investment Group), Daniel Wiener (Founder of RWA Wealth Partners)

Factuality Level: 7
Justification: The article provides information about the performance of the 60/40 portfolio in November and its historical performance. It includes quotes from experts expressing caution and differing opinions on the future of the portfolio. The information presented is based on data from BofA Securities and the opinions of experts. However, the article does not provide a comprehensive analysis of the portfolio or consider alternative perspectives, which lowers its factuality level.

Noise Level: 4
Justification: The article provides some relevant information about the performance of the 60/40 portfolio in November and its historical performance. However, it lacks in-depth analysis and evidence to support its claims. It also does not provide actionable insights or explore the consequences of the portfolio on investors. The article contains some repetitive information and does not stay focused on the topic.

Financial Relevance: Yes
Financial Markets Impacted: The article discusses the performance of the 60/40 portfolio, which is a common investment strategy. It provides insights into the performance of stocks and bonds and how it may impact investors’ portfolios.

Presence of Extreme Event: No
Nature of Extreme Event: No
Impact Rating of the Extreme Event: No
Justification: The article primarily focuses on the performance of the 60/40 portfolio and does not mention any extreme events or their impact.

Reported publicly: www.marketwatch.com