For several decades, as bond prices have trended cyclically higher, a common “diversified” portfolio was a 60% allocation to stocks and a 40% allocation to bonds. With US interest rates at historic lows – and bond prices at all-time highs – Bernstein answers “three big questions,” among them: “Is 60:40 dead?”. In brief, the answer is that 60:40 Portfolio Allocation is dead. Goodbye 60:40 Portfolio Allocation The answer is yes, the traditional asset allocation method towards stocks and bonds is finished. Bernstein analyst Inigo Fraser-Jenkins, in a June 28 report, recognizes the jarring significance of the move. “The idea of…
Bernstein: Death of 60:40 Portfolio Allocation Upon Us
Mark Melin
Mark Melin is an alternative investment practitioner whose specialty is recognizing the impact of beta market environment on a technical trading strategy. A portfolio and industry consultant, wrote or edited three books including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008) and taught a course at Northwestern University's executive education program.