Bernstein: Death of 60:40 Portfolio Allocation Upon Us

For several decades, as bond prices have trended cyclically higher, a common “diversified” portfolio was a 60% allocation to stocks and a 40% allocation to bonds. With US interest rates at historic lows – and bond prices at all-time highs – Bernstein answers “three big questions,” among them: “Is 60:40 dead?”. In brief, the answer is that 60:40 Portfolio Allocation is dead.

Goodbye 60:40 Portfolio Allocation

The answer is yes, the traditional asset allocation method towards stocks and bonds is finished. Bernstein analyst Inigo Fraser-Jenkins, in a June 28 report, recognizes the jarring significance of the move.

“The idea of asset allocation starting from a position of 60% equities and 40% bonds...