The 60/40 Portfolio Is Dead Because Bonds No Longer Work | Louis Gave

44 snips

Dec 16, 2025

Louis Gave, the Founding Partner and CEO of Gavekal, dives into the shifting landscape of global investments. He argues that the traditional 60/40 portfolio is losing its effectiveness, as inflation drives investors toward energy stocks instead of bonds. Gave highlights emerging markets and Latin America as hotspots for opportunity, while also expressing concerns about rising energy prices and the AI bubble. He discusses the potential impact of geopolitical shifts, emphasizing that understanding these trends is crucial for savvy investors.

Ask episode

AI Snips

Chapters

Transcript

Episode notes

INSIGHT

60/40 Portfolio Is Dead

The classic 60% equities / 40% bonds portfolio died with COVID and the policy shift since then.
Louis Gave argues bonds no longer diversify equity risk under structurally more inflationary policy settings.

INSIGHT

Global Reflationary Policy Regime

Global policy is highly reflationary: large fiscal deficits plus accommodative central banks across major economies.
That combination is driving reflationary trades like metals and emerging markets outperformance.

INSIGHT

Three Risks That Could Derail Reflation

Three linked risks could derail reflation: rising energy prices, an AI-capex bust, and Asian currency revaluation.
These risks can interact and create contagion that flips reflation into disinflation or stagflation.

Get the Snipd Podcast app to discover more snips from this episode

Get the app

While much of Wall Street's focus over past recent years has been on the AI hyperscalers, there are an increasing number of seismic developments happening internationally investors need to be aware of.For example, as a basket, emerging market stocks have outperformed the S&P 500 this year.And to name just a few others:1) Japanese bond yields have surged to the highest levels in 20 years, threatening to put an end to the carry trade2) A US-driven regime change in Venezuela looks imminent3) China continues to fire its monetary and fiscal bazookas with gusto in attempt to pull itself out of its deep balance sheet recession4) And in the wake of negotiating a tenuous peace between Isreal and Palestine, renewed efforts are underway to bring an end to the Russia/Ukraine warWhich international trends are the most important for investors to track? What are the biggest risks? And where are the biggest opportunities?To better understand the situation from a non-US perspective, we're fortunate to welcome back to the program Louis Gave, Founding Partner and CEO at Gavekal.

WORRIED ABOUT THE MARKET? SCHEDULE YOUR FREE PORTFOLIO REVIEW with Thoughtful Money's endorsed financial advisors at https://www.thoughtfulmoney.com#emergingmarkets #inflationhedge #bonds _____________________________________________ Thoughtful Money LLC is a Registered Investment Advisor Promoter.We produce educational content geared for the individual investor. It’s important to note that this content is NOT investment advice, individual or otherwise, nor should be construed as such.We recommend that most investors, especially if inexperienced, should consider benefiting from the direction and guidance of a qualified financial advisor registered with the U.S. Securities and Exchange Commission (SEC) or state securities regulators who can develop & implement a personalized financial plan based on a customer’s unique goals, needs & risk tolerance.IMPORTANT NOTE: There are risks associated with investing in securities.Investing in stocks, bonds, exchange traded funds, mutual funds, money market funds, and other types of securities involve risk of loss. Loss of principal is possible. Some high risk investments may use leverage, which will accentuate gains & losses. Foreign investing involves special risks, including a greater volatility and political, economic and currency risks and differences in accounting methods.A security’s or a firm’s past investment performance is not a guarantee or predictor of future investment performance.Thoughtful Money and the Thoughtful Money logo are trademarks of Thoughtful Money LLC.Copyright © 2025 Thoughtful Money LLC. All rights reserved.