The Trusted 60-40 Investing Strategy Just Had Its Worst Year in Generations
Higher interest rates and inflation are upending millions of Americans' retirement planning. The classic 60-40 stock-to-bond ratio isn't cutting it anymore.
Correlation between returns on the S&P 500 index and those of long-term Treasury Bonds
Two-decade high
0.50
Assets
Moving -
Financial
Crisis
0.25
0
-0.25
-0.50
The opposite
Directions
-0.75
1950
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'70
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2000
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In their 50-year marriage, Dave Lindenstruth and Kathy Lindenstruth have adopted a Wall Street strategy that has been used for decades to protect and grow their retirement nest eggs: a 60-40 mix of U.S. bonds and 60% stocks. It is now failing them.
Dave Lindenstruth stated that he had seen his portfolio on a few occasions and thought, "Oh, crap!"