The 60/40 Portfolio: down but not out

This has been a challenging year for investors. On top of the equity bear market, the steep losses in bonds1 have been especially surprising, leading some investors to question whether the classic 60/40 portfolio is dead. Although 2022 has seen the worst start to a year in history for many bond indices,1 the year-to-date experience for a 60/40 portfolio has not even cracked the top (or, alternatively, worst) five historical drawdowns of the last century. A 19% loss of wealth is not all that fun, but it’s only two-thirds of the drawdown investors endured through the financial crisis of 2008–2009 (see Exhibit 1).

To see Exhibit 1 and the rest of the article, click here

Robert J. Pyle, CFP®, CFA, AEP® founded Diversified Asset Management, Inc., in 1996 to provide personalized, comprehensive wealth management services to successful individuals, families, single women, and business owners. His specialty is addressing the complex financial needs of self-employed professionals, corporate executives, and small-business owners. Our disclosure can be found here. The views, opinion, information, and content provided here are solely those of the respective authors, and may not represent the views or opinions of Diversified Asset Management, Inc. Diversified Asset Management, Inc. cannot guarantee the accuracy or currency of any such third party information or content, and does not undertake to verify or update such information or content. Any such information or other content should not be construed as investment, legal, accounting, or tax advice.