The portfolio model has started to split between 60% stocks and 40% bonds and has struggled in 2022 amid high inflation and rising interest rates.
financial planners and experts said that investors still have a value for a 60/40 portfolio despite headwinds. Talking about the starters, there are few other places to turn to. By diversifying within the range of stock and bond categories investors can be benefitted. This is good from a business point of view.
But investors do sound like the death knell for the classic investment strategy. Financial advisors and experts don’t think so, but it likely needs a break or a new starting. Allan Roth, a certified financial planner based in Colorado Springs, Colorado stated “It’s stressed, but it’s not dead,” (Source: CNBC)
“60/40” is a term used to elaborate on the broader concept of investment diversification. It means when stocks (the growth engine of a portfolio) don’t perform well, bonds provide stability since they often don’t move in tandem.
Low-interest rates and below-average inflation kept stocks and bonds preferable. But times have changed now and so as the market conditions. Interest rates and inflation are increasing
As the year isn’t over yet, it isn’t so easy to assume if the situation will get better or worse. Financial advisors considered Slim to be a good option, at a time of most asset classes getting hammered
