S&P 500: Why 2026 Is A Bad Year To Do 60-40

2026-01-12 16:00:05 ET

How 60-40 Worked In The Past

As all major equity indices (such as the DJI , SP500 , NASDAQ , and RTY ) started 2026 at near record prices, I have been asked by several friends about the 60-40 portfolio (i.e., a portfolio consisting of 60 percent equities and 40 percent fixed income). I can totally see the reasons behind their interest at this juncture. First, equity valuation is quite elevated, which makes bonds relatively cheap given their current yield (and I will elaborate more in the third section on this point). Second, the 60-40 model has historically served as the gold standard for balanced investing and worked beautifully. It is easier for investors to find comfort in a time-proven model....

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