60/40 Portfolio: How bond volatility has busted the safety valve

The traditional 60/40 investment strategy is facing difficulties due to the highest bond swings in more than ten years. Although such appalling events are not likely to occur again, some big names on Wall Street are proposing alternative diversification due to the volatility in debt markets. Traditionally well-respected 60/40 portfolios, holding 60% stocks and 40% bonds, underperformed last year and recent turbulence within bonds has made them less attractive for diversification purposes. The correlation between the assets is being tested.

60/40 Portfolio: How bond volatility has busted the safety valve
The traditional 60/40 investment strategy is facing difficulties due to the highest bond swings in more than ten years. Although such appalling events are not likely to occur again, some big names on Wall Street are proposing alternative diversification due to the volatility in debt markets. Traditionally well-respected 60/40 portfolios, holding 60% stocks and 40% bonds, underperformed last year and recent turbulence within bonds has made them less attractive for diversification purposes. The correlation between the assets is being tested.