Sound Investing Saving for Retirement: 100% S&P 500 vs. 60/40 — A Lifetime Portfolio Comparison
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Sep 10, 2025 Dive into a captivating analysis of retirement investment strategies! Discover the long-term implications of choosing between an all-equity portfolio versus a classic 60/40 mix of stocks and bonds. Historical performance data sheds light on returns and risks, while examining the impact of initial investments and contributions over 55 years. Prepare for insightful discussions to guide your portfolio decisions in this intriguing exploration of saving for retirement.
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Consider One-Portfolio-For-Life Options
- Consider a single lifetime allocation like ‘Two Funds for Life’ that shifts exposure gradually via a target-date-like approach.
- Use this if you want a simple plan that moves from high equity to more balance as you age.
Higher Returns Come With Higher Downside Risk
- A 100% equity portfolio usually yields higher long-term returns than a 60/40 mix because stocks generally outperform bonds.
- However, the difference in compound return (10.9% vs 9.5% from 1970–2024) came with notably higher downside risk for equities.
60/40 Halves Downside Exposure
- Measuring risk by downside losses shows 60/40 roughly halves loss exposure compared to 100% S&P 500 from 1970–2024.
- The sum of down-years and average loss were materially lower for 60/40, indicating less severe drawdowns.