- The 60/40 portfolio took a beating last year, but it’s poised for a decade of strong returns, Vanguard says.
- Current valuations suggest the outlook has improved, even for the portfolio’s worst-case risk scenario.
- Strategists broke down the biggest misconceptions about the 60/40 portfolio mix.
Even after a brutal 2022, Vanguard strategists don’t see a reason to ditch the tried-and-true 60/40 portfolio mix. In fact, they think a decade of strong returns awaits investors who opt for the classic mix of stocks and bonds.
A portfolio that held 60% stocks and 40% bonds took a loss of about 16% last year, which raised doubts about whether the strategy could remain viable in an age of painful volatility and heightened macro risks. But pushing the timeframe out a full decade, the classic portfolio composition retains its promise of steady returns for investors.
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