Money For the Rest of Us

Does a 60/40 Balanced Portfolio Still Work? Time to Jettison Non-U.S. Stocks?

Feb 8, 2023

27:32

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Quick takeaways

Traditional 60-40 portfolios are evolving to include non-US stocks and additional asset classes for diversification and success.

Despite facing losses in 2022, 60-40 portfolios historically show resilience with positive annual returns and offer simplicity and diversification for investors.

Deep dives

The Evolution of Portfolio Construction

As the years progressed, traditional 60-40 portfolios have evolved to include non-US stocks, small cap stocks, and additional asset classes like real estate trusts and private investments. While these additions may seem complex, understanding one's investments is crucial to success, especially during challenging financial years.

The Average 60-40 Portfolio Losses in 2022

03:01

How Do US Stocks Compare to Non-Us Stocks?

02:51

Do Balanced Portfolios Still Work?

02:24

Introduction

3min

The Average 60-40 Portfolio Losses in 2022

3min

The Best Argument for a 60-40 Balanced Portfolio

6min

Is 60-40 a Bad Portfolio?

2min

LinkedIn Jobs - How to Find the Right People for Your Team

2min

The Insider's Guide to Investing

3min

How Do US Stocks Compare to Non-Us Stocks?

3min

The Return of Emerging Market Stocks

3min

Emerging Market Returns - What's the Reasonable Amount?

3min

10.

Do Balanced Portfolios Still Work?

2min

What are the pros and cons of a simple stock and bond portfolio consisting of two funds or ETFs? Given U.S. stocks have significantly outperformed the rest of the world over the past decade, is there even a role for non-U.S. stocks in your investment portfolio?

Topics covered include:

How have 60/40 and similar portfolios performed over the long-term
What are the advantages and disadvantages of a 60/40 portfolio
What is the expected return of a 60/40 portfolio and what should be included?
What has contributed to U.S. stocks outperforming non-U.S. stocks over the past decade
Why have emerging markets stocks done so poorly
What has to happen for U.S. stocks to continue to outperform non-U.S. stocks

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Show Notes

BlackRock vs. Goldman in the Fight Over 60/40 by James Mackintosh—The Wall Street Journal

Battered 60-40 portfolios face another challenging year by Adrienne Klasa—Financial Times

The case for the 60/40 portfolio in equities and bonds by Erin Browne—Financial Times

Investors wonder if the 60/40 portfolio has a future by Michael Mackenzie—Financial Times

Has the tried and tested 60/40 strategy soured? by Maya Bhandari—Financial Times

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