Updated September 18, 2025
Beyond the 60/40: Why the Classic Investment Blend Is More Challenged Today — and What to Do
Beyond the 60/40: Why the Classic Investment Blend Is More Challenged Today — and What to Do
Beyond the 60/40: Why the Classic Investment Blend Is More Challenged Today — and What to Do
Allio Capital Team
The Macroscope
Beyond the 60/40: Why the Classic Investment Blend Is More Challenged Today — and What to Do
The traditional 60/40 portfolio has recovered from turmoil earlier this decade
New risks have emerged, requiring critical thinking among investors and thoughtful allocation methods
We outline why a dynamic macro portfolio can be an effective solution to help individuals confidently reach their goals
Financial pundits have been outspoken about the risks associated with the traditional 60/40 portfolio. The allocation of 60% US stocks and 40% US bonds came under attack during the post-COVID inflation shock and subsequent fixed-income bear market. “The 60/40 is dead,” decried its detractors. But guess what happened? This so-called “balanced” investing approach actually performed quite well.
From the bear-market low in the stock market in October 2022 through much of 2025’s third quarter, the S&P 500 returned more than 90%. The US aggregate bond market delivered a nearly 20% total return in that stretch. Gains since October 2023 were likewise impressive, to the tune of 55% for the S&P 500 Total Return Index and 16% for the Bloomberg Aggregate Bond Index.
Stocks and Bonds Have Rallied Since October 2022
Source: Stockcharts.com
The result? The tried-and-true 60/40 was not only “not dead,” but it seemed as alive and kicking as ever by late 2025.
Key to the 60/40’s impressive performance was the resilient confidence global investors placed in the US bond market. It’s something we detailed shortly after Liberation Day, when some critics contended that US exceptionalism was dead and that foreign markets were set to outperform in a major way and for an extended period. The yield on the benchmark 10-year Treasury rate fell from near 5% to 4% from May through September 2025, just as the US Federal Reserve resumed its rate-cutting cycle.
Bonds are just the “40” in the 60/40 portfolio, however. The “60” stock sleeve has performed well in the past, led by certain companies since the October 2022 bear-market bottom. Past performance is not indicative of future results. Newcomers have boosted US large-cap returns, including NVIDIA (NVDA) rival Broadcom (AVGO) and Larry Ellison’s Oracle (ORLC). Now sporting a 20% compounded annualized growth rate (CAGR) since early Q4 2022, the S&P 500 boasts a premium price-to-earnings (P/E) multiple and high concentration in its top 10 positions.
The S&P 500’s P/E Ratio is Near 23x
Source: FactSet
The traditional 60/40 portfolio may have been put to pasture by some portfolio managers in the wake of Biden-era inflation, but it’s clearly not dead based on historical returns. Here’s the question investors must grapple with today: Will the 60/40 keep churning out consistent annualized returns of 10%-plus?
It’s hard to justify that it will. What’s more, today’s macro risks augur for a better, more holistic approach. Yes, US large-cap stocks and investment-grade bonds have a place, but so too do asset classes like commodities, real estate, gold, and cryptocurrency.
Let’s flesh out a better method to “balanced” investing in today’s dynamic world of new products, new pitfalls, and new opportunities.
60/40: The Background on a Time-Tested Portfolio Strategy
For decades, the 60/40 has been the bedrock of many investors’ allocations. It’s simple: stocks provide growth, bonds provide income and act as a hedge against market downturns. The result since the early 1980s has been stellar risk-adjusted returns, especially when bonds moved inversely to stocks. That was then.
Stocks Have Done the 60/40’s Heavy Lifting
Source: Apollo Global
One thing about markets is that correlations don’t hold indefinitely. Regimes change, and investors are forced to confront the shifts in order to manage risk. Today, we are in an inflationary regime, which often means stocks and bonds move together. The benchmark 60/40 portfolio endured historic losses in 2022, and with little warning.
60/40 Losses Can Be Devastating
Source: Ray Dalio
Jump ahead to today, and despite the bond market’s recovery and falling interest rates (remember that bond prices move opposite to bond interest rates), cracks are forming:
The correlation between the S&P 500 and US Treasurys is now structurally higher than it was from the mid-1990s through the pre-COVID era.
The S&P 500 is concentrated.
Other asset classes are emerging.
At Allio, we believe in a smarter, more independent mindset to combat modern risks. It includes having exposure to other asset classes and embracing a dynamic macro portfolio approach—not one that merely sits back and accepts market returns.
US Stocks and Treasurys Have Turned Positively Correlated in the 2020s
Source: BlackRock
The New Challenges Facing Bonds, Stocks, and the 60/40 Regime
Foundational relationships that were once the linchpin to traditional investment management have been broken, making portfolios significantly riskier now compared to, say, a decade ago.
But it doesn’t feel that way, right? The S&P 500 has logged dozens of new record highs this year, while the bond market has bucked consensus expectations for modest (or even negative) returns. As they say in the financial world, past performance is no guarantee of future results, and four key challenges are right in front of all of us.
Global Bond Market Risks Are Mounting
The US Treasury market is the best house in a bad neighborhood. It’s the cleanest shirt in a dirty laundry basket. Call it what you will, but amid the media fearmongering after President Trump’s tariffs went into effect and Congress passed the One Big, Beautiful Bill Act (OBBBA), US credit held strong. Long-term interest rates at home wobbled, but ultimately retreated, reaffirming the US's good standing in the financial market world.
The same cannot be said for global sovereign bond arenas. 30-year interest rates in Japan, Germany, the UK, and France are at decade-plus highs (Japan’s even at an all-time high). That means investors have been selling international bonds en masse. Why? Increasing debt burdens.
Push is coming to shove across the developed world outside our borders. Budget deficits are wide, GDP growth is sluggish, and less globalization means those nations must stand on their own (with less support and financial handouts from the US). Large institutional investors are voting with their feet, reallocating away from international long-term bonds.
The US Treasury market has bucked the trend so far. Yes, there have been moments of “yips” with the 30-year long-bond, but Treasury volatility has settled down. The risk is that what’s happening overseas eventually manifests itself in the US fixed-income world. Given that the US national debt is on the doorstep of $40 trillion and annual budget deficits could still be in the trillions going forward, policy uncertainty is high.
Just look at price action. Global yield curves have steepened, meaning that long-term interest rates have increased relative to short-term rates. In many cases, it has been a “bear steepener,” in which long-dated bonds fall in value. Moreover, the so-called “term premium” embedded in the bond market has jumped, underscoring perceived systemic uncertainty.
Global Interest Rates Rising
Source: Koyfin Charts
The list of concerns related to today’s government bond market is long, despite corporate credit quality looking excellent. The problem there is that “yield spreads,” the extra interest rate amount earned for taking on riskier corporate bonds versus Treasurys, is near the tightest level since the late 1990s.
In short, there’s not much juice left to squeeze by stepping out on the credit risk curve either. As a reminder, the high-yield bond market often acts more like the stock market than the bond market, so it does a portfolio little good to load up on “junk” bonds.
Investment-Grade Corporate Credit Spreads Near Century-Lows
Source: FRED
Stock-Bond Correlations are Increasing
Indeed, the list of landmines in the fixed-income world is gaudy right now. Perhaps as a result, bonds trade like risky instruments rather than a safe haven. Historically, high-grade bonds (namely Treasurys) provided negative or low correlation with stocks, helping cushion equity losses. But since the inflation shocks post-COVID, and with the aforementioned macro forces in play, there have been periods of positive correlation, meaning both stocks and bonds fall together.
For the 60/40 portfolio, risk reduction is greatly diminished when both pieces move together. (Ideally, stocks zig when bonds zag, and vice versa.) You might wonder why stock-bond correlations have increased in recent years compared to previous decades.
It really boils down to inflation. When investors fear jumpy inflation and higher interest rates, the bond-market tail can wag the stock-market dog. Conversely, amid low-inflation or even deflationary regimes, bonds are the safety trade—they attract buyers during stock market selloffs and credit-risk events. The Great Financial Crisis of 2008 and the European debt debacle in 2011 are cases in point.
The macro regime flipped on a dime in 2022 when US inflation spiked to a 40-year high. The Fed was forced to raise interest rates, which caused bond prices to sink. Stocks, being discounting mechanisms, performed poorly as the era of free money quickly came to an end. In general, higher interest rates cause the present value of future cash flows and profits to decline.
The stock-bond correlation has cooled somewhat as 2025 has progressed, but it’s sort of like a dormant volcano or a sleeping giant of risk that could wake up at any time. Investors must prepare themselves by owning a truly diversified global portfolio. More on that to come.
Bonds Don’t Always Hedge Equity Risk
Source: BofA Global Research
The US Stock Market is Concentrated and No Bargain
We’ve spent a lot of time on the “40” of the 60/40, but what about the “60”? Stocks, after all, are the growth engine to help you reach your financial goals. As it stands, that engine is firing on just a few cylinders. The largest 10 S&P 500 stocks now account for 40% of the total index, the highest in decades. Additionally, they are all a similar play on tech and AI. To be clear, our team is bullish on this megatrend long-term, but that doesn’t justify going all-in on the current behemoths at current prices.
The S&P 500 probably deserves a premium price-to-earnings valuation multiple. Today, it's 23x, well above the long-term average (which is in the mid-to-high teens depending on the starting date). What does 23x tell us? Framing it against the bond market is a common approach. Here’s what we mean:
First, invert the P/E ratio into a percentage, and we get an “earnings yield” of 4.3%. Now, stocks are real investments, meaning they are claims on real assets and cash flows that generally include inflation. Thus, comparing the S&P 500’s earnings yield to the yield on inflation-adjusted Treasury notes is appropriate. Today, the 10-year TIPS (Treasury Inflation-Protected Securities) interest rate is 1.7%. Finally, subtract the TIPS yield of 1.7% from the earnings yield of 4.3% to arrive at the “equity risk premium” of 2.6%.
The equity risk premium (ERP) is the extra return an investor can expect to earn from investing in stocks (the S&P 500) compared to a default-risk-free Treasury note. 2.6% is historically paltry. It's better in the ex-US stock market, but rising interest rates are also compressing the ERP in many foreign markets.
S&P 500 Earnings Growth Concentrated Among the Largest Companies
Source: BlackRock
The 10 Largest US Stocks Account for 40% of the S&P 500 Index and Just 30% of Earnings
Source: Augur Infinity
S&P 500 Equity Risk Premium Very Low at 2.6%
Source: WisdomTree
Global Market-Implied Equity Risk Premiums Appear Better than the US, Still Low
Source: Goldman Sachs
The Dollar Could Trend Lower
Have we scared you away from investing yet? It gets worse! But take heart, we’ll deliver solutions when we wrap up. Adding to the litany of worries is the US dollar.
The greenback’s role as the world’s reserve currency has underpinned much of the demand for US sovereign debt and US-based assets more broadly. Once again, there are signs of strain, including debates about fiscal sustainability, trade policy frictions, and global discussions about de-dollarization or seeking more diversified reserve holdings.
If the dollar weakens materially (or if its reserve status is challenged), ex-US assets may benefit (both stocks and bonds abroad). Look no further than the first half of 2025—the dollar weakened by 10% against a basket of foreign currencies. Ex-US stocks soared, while hard assets priced in dollars became beacons of safety for risk-averse investors.
From a policy perspective, the Trump administration has made it clear that a weaker dollar is not necessarily a bad thing. Our team has studied the Mar-a-Lago Accord, reportedly hatched by Stephen Miran, President Trump’s former chair of the Council of Economic Advisers and now a fresh temporary voting member on the Federal Open Market Committee. It augurs for a gradual weakening of the dollar, extending the duration of US debt, and using tariffs to reduce budget deficits over time. If that comes to pass, we could see sustained strength in non-US dollar-denominated assets.
US Dollar Index -11% YTD, Pacing for One of Its Worst Years since 1986
Source: TradingView
Beyond 60/40: Where Diversification Lives Now
The 60/40 has revived itself in recent quarters, benefitting risk-conscious investors and those allocated to target-date retirement funds. Of course, the 60/40 isn’t dead; parts of it still work, especially in certain environments, for investors who don’t have the ability, willingness, and need to take 100% stock market risk. The key is adapting to today’s macro landscape and not making mere token shifts in asset weights to US stocks and bonds.
Next-generation portfolio construction looks beyond the 60/40 mix. Here’s how we go about it for investors at Allio:
Equity Strategy
Not all stocks are richly priced. US mid- and small-cap equities broadly feature mid-teens P/E ratios, and the same goes for non-US developed and emerging markets. A more robust 60/40 portfolio includes international diversification that can benefit from a sagging dollar and lower valuations.
For extra insight, we believe AI’s benefits will eventually trickle down to real-economy businesses (not just mega-cap tech firms), and that could subsequently pull small caps out of their years-long bear market. (The Russell 2000 remains below its November 2021 all-time high.) Sectors like Industrials, Health Care, and even Consumer Staples could all harness AI’s power to grow earnings and reward shareholders.
Beyond our borders, though we favor US stocks in general, we recognize that growth potential rests in many unloved ends of the earth. European stocks, emerging markets, and even Latin American countries have all performed well in 2025. We can’t rule out continued alpha there in the years ahead.
US Mid- and Small-Cap Stocks Just 15-17x Earnings
Source: Yardeni Research
Regional P/E Ratios: Better Value Overseas?
Source: Goldman Sachs
Smart Bond Allocations
Fixed income, while correlated with stocks since 2022, still has a place for some investors. The yield on the Bloomberg Aggregate Bond Index is 4.3% as of mid-September 2025. At the same time, US inflation swaps price in less than 3% inflation over the next five to 10 years, suggesting positive real returns in high-grade corporate credit and Treasurys.
We must be realistic about what fixed income may deliver, though. A 1-2% real yield (before taxes) with possibly no diversification benefit to stocks is not all that appealing. Corporate bonds are richly priced compared to historical interest rate spreads, too. So, most young investors with time horizons spanning decades should not hide out in Treasury bills, notes, and bonds.
US Inflation Swaps Point to 2.5-3% Inflation Over the Remainder of the Decade
Source: Augur Infinity
Interest-Earning Cash as Dry Powder
Cash is another tool—it must be wielded effectively, however. As the Fed lowers interest rates, cash is simply not sufficient to get investors to their goals. After accounting for inflation and taxes, there’s a good chance that cash will deliver negative returns. So, consider it as dry powder rather than a strategic allocation slice.
Commodities
Commodities have the potential to perform well this cycle. Crude oil commands a high weight in the benchmark Commodity Research Bureau (CRB) Index. Unfortunately for individuals with oil exposure, both WTI and Brent have been duds ever since inflation’s peak in mid-2022. Other spots, like copper, cocoa, and coffee, have performed better. Similar to bonds, a nuanced and independent approach is necessary when managing commodity exposure.
Real Estate
Real estate stocks, including Real Estate Investment Trusts (REITs), have lagged but could stage a comeback if interest rates drift lower and the economy remains on a decent footing. Unlike bonds, real estate can deliver both income and inflation protection and is less correlated to stocks in many macro regimes. The Real Estate Select Sector SPDR ETF (XLRE) is the worst-performing of the 11 S&P 500 sector funds over the past three years, so perhaps it falls into the “so bad, it’s good” category.
S&P 500 Sector ETF Returns Last 3 Years: Real Estate Worst, a Potential Value
Source: Koyfin Charts
Gold
Gold speaks for itself at this point. The precious metal, which we have embraced for years, has hit both nominal and inflation-adjusted all-time highs this year. A store of value for millennia, it can hedge against long-term inflation and a falling dollar. Don’t go all-in on the yellow metal, though, as its long-term return pales in comparison to stocks. And gold doesn’t pay any kind of income or dividend yield.
US Asset Long-Term Returns: Stocks Still Best (Gold a 1-2% Real Annual Return)
Source: Augur Infinity
Cryptocurrency
We have also advocated for investors to consider including cryptocurrencies, like bitcoin and ether, in their portfolio. Crypto’s role remains contentious, but as a diversifier, it offers unique exposure to emerging technology and alternative stores of value. US policy action has also turned more accepting of digital assets, including stablecoins, which could draw a new set of institutional demand. Of course, crypto is highly speculative and should be a supplementary sleeve, not a core one.
Bitcoin & Crypto Still Small Relative to Gold and the Global Financial Market
Source: Augur Infinity
The Right Recipe Given the Ingredients
Allio’s portfolios combine these asset classes to craft portfolios for investors with a range of risk and return objectives and time horizons. We believe that personalization and a macro approach to today’s complex markets can help steer investors through a winding global financial marketplace. Our ALTITUDE AI technology integrates predictive models and macro data to guide portfolio construction, manage risk, and deliver a tailored investing experience.
What’s the perfect dynamic macro portfolio recipe for you? Download our app and find out.
The Bottom Line
The 60/40 portfolio was an elegant solution for an era of negative stock-bond correlations, steady growth, and concentrated US outperformance. But in 2025, macro challenges demand a more thoughtful approach. The path forward is not rejecting 60/40 entirely, but evolving it: building in broader diversification, more dynamic allocation, and a willingness to look globally and across asset classes. Are you ready to invest smarter?
Beyond the 60/40: Why the Classic Investment Blend Is More Challenged Today — and What to Do
The traditional 60/40 portfolio has recovered from turmoil earlier this decade
New risks have emerged, requiring critical thinking among investors and thoughtful allocation methods
We outline why a dynamic macro portfolio can be an effective solution to help individuals confidently reach their goals
Financial pundits have been outspoken about the risks associated with the traditional 60/40 portfolio. The allocation of 60% US stocks and 40% US bonds came under attack during the post-COVID inflation shock and subsequent fixed-income bear market. “The 60/40 is dead,” decried its detractors. But guess what happened? This so-called “balanced” investing approach actually performed quite well.
From the bear-market low in the stock market in October 2022 through much of 2025’s third quarter, the S&P 500 returned more than 90%. The US aggregate bond market delivered a nearly 20% total return in that stretch. Gains since October 2023 were likewise impressive, to the tune of 55% for the S&P 500 Total Return Index and 16% for the Bloomberg Aggregate Bond Index.
Stocks and Bonds Have Rallied Since October 2022
Source: Stockcharts.com
The result? The tried-and-true 60/40 was not only “not dead,” but it seemed as alive and kicking as ever by late 2025.
Key to the 60/40’s impressive performance was the resilient confidence global investors placed in the US bond market. It’s something we detailed shortly after Liberation Day, when some critics contended that US exceptionalism was dead and that foreign markets were set to outperform in a major way and for an extended period. The yield on the benchmark 10-year Treasury rate fell from near 5% to 4% from May through September 2025, just as the US Federal Reserve resumed its rate-cutting cycle.
Bonds are just the “40” in the 60/40 portfolio, however. The “60” stock sleeve has performed well in the past, led by certain companies since the October 2022 bear-market bottom. Past performance is not indicative of future results. Newcomers have boosted US large-cap returns, including NVIDIA (NVDA) rival Broadcom (AVGO) and Larry Ellison’s Oracle (ORLC). Now sporting a 20% compounded annualized growth rate (CAGR) since early Q4 2022, the S&P 500 boasts a premium price-to-earnings (P/E) multiple and high concentration in its top 10 positions.
The S&P 500’s P/E Ratio is Near 23x
Source: FactSet
The traditional 60/40 portfolio may have been put to pasture by some portfolio managers in the wake of Biden-era inflation, but it’s clearly not dead based on historical returns. Here’s the question investors must grapple with today: Will the 60/40 keep churning out consistent annualized returns of 10%-plus?
It’s hard to justify that it will. What’s more, today’s macro risks augur for a better, more holistic approach. Yes, US large-cap stocks and investment-grade bonds have a place, but so too do asset classes like commodities, real estate, gold, and cryptocurrency.
Let’s flesh out a better method to “balanced” investing in today’s dynamic world of new products, new pitfalls, and new opportunities.
60/40: The Background on a Time-Tested Portfolio Strategy
For decades, the 60/40 has been the bedrock of many investors’ allocations. It’s simple: stocks provide growth, bonds provide income and act as a hedge against market downturns. The result since the early 1980s has been stellar risk-adjusted returns, especially when bonds moved inversely to stocks. That was then.
Stocks Have Done the 60/40’s Heavy Lifting
Source: Apollo Global
One thing about markets is that correlations don’t hold indefinitely. Regimes change, and investors are forced to confront the shifts in order to manage risk. Today, we are in an inflationary regime, which often means stocks and bonds move together. The benchmark 60/40 portfolio endured historic losses in 2022, and with little warning.
60/40 Losses Can Be Devastating
Source: Ray Dalio
Jump ahead to today, and despite the bond market’s recovery and falling interest rates (remember that bond prices move opposite to bond interest rates), cracks are forming:
The correlation between the S&P 500 and US Treasurys is now structurally higher than it was from the mid-1990s through the pre-COVID era.
The S&P 500 is concentrated.
Other asset classes are emerging.
At Allio, we believe in a smarter, more independent mindset to combat modern risks. It includes having exposure to other asset classes and embracing a dynamic macro portfolio approach—not one that merely sits back and accepts market returns.
US Stocks and Treasurys Have Turned Positively Correlated in the 2020s
Source: BlackRock
The New Challenges Facing Bonds, Stocks, and the 60/40 Regime
Foundational relationships that were once the linchpin to traditional investment management have been broken, making portfolios significantly riskier now compared to, say, a decade ago.
But it doesn’t feel that way, right? The S&P 500 has logged dozens of new record highs this year, while the bond market has bucked consensus expectations for modest (or even negative) returns. As they say in the financial world, past performance is no guarantee of future results, and four key challenges are right in front of all of us.
Global Bond Market Risks Are Mounting
The US Treasury market is the best house in a bad neighborhood. It’s the cleanest shirt in a dirty laundry basket. Call it what you will, but amid the media fearmongering after President Trump’s tariffs went into effect and Congress passed the One Big, Beautiful Bill Act (OBBBA), US credit held strong. Long-term interest rates at home wobbled, but ultimately retreated, reaffirming the US's good standing in the financial market world.
The same cannot be said for global sovereign bond arenas. 30-year interest rates in Japan, Germany, the UK, and France are at decade-plus highs (Japan’s even at an all-time high). That means investors have been selling international bonds en masse. Why? Increasing debt burdens.
Push is coming to shove across the developed world outside our borders. Budget deficits are wide, GDP growth is sluggish, and less globalization means those nations must stand on their own (with less support and financial handouts from the US). Large institutional investors are voting with their feet, reallocating away from international long-term bonds.
The US Treasury market has bucked the trend so far. Yes, there have been moments of “yips” with the 30-year long-bond, but Treasury volatility has settled down. The risk is that what’s happening overseas eventually manifests itself in the US fixed-income world. Given that the US national debt is on the doorstep of $40 trillion and annual budget deficits could still be in the trillions going forward, policy uncertainty is high.
Just look at price action. Global yield curves have steepened, meaning that long-term interest rates have increased relative to short-term rates. In many cases, it has been a “bear steepener,” in which long-dated bonds fall in value. Moreover, the so-called “term premium” embedded in the bond market has jumped, underscoring perceived systemic uncertainty.
Global Interest Rates Rising
Source: Koyfin Charts
The list of concerns related to today’s government bond market is long, despite corporate credit quality looking excellent. The problem there is that “yield spreads,” the extra interest rate amount earned for taking on riskier corporate bonds versus Treasurys, is near the tightest level since the late 1990s.
In short, there’s not much juice left to squeeze by stepping out on the credit risk curve either. As a reminder, the high-yield bond market often acts more like the stock market than the bond market, so it does a portfolio little good to load up on “junk” bonds.
Investment-Grade Corporate Credit Spreads Near Century-Lows
Source: FRED
Stock-Bond Correlations are Increasing
Indeed, the list of landmines in the fixed-income world is gaudy right now. Perhaps as a result, bonds trade like risky instruments rather than a safe haven. Historically, high-grade bonds (namely Treasurys) provided negative or low correlation with stocks, helping cushion equity losses. But since the inflation shocks post-COVID, and with the aforementioned macro forces in play, there have been periods of positive correlation, meaning both stocks and bonds fall together.
For the 60/40 portfolio, risk reduction is greatly diminished when both pieces move together. (Ideally, stocks zig when bonds zag, and vice versa.) You might wonder why stock-bond correlations have increased in recent years compared to previous decades.
It really boils down to inflation. When investors fear jumpy inflation and higher interest rates, the bond-market tail can wag the stock-market dog. Conversely, amid low-inflation or even deflationary regimes, bonds are the safety trade—they attract buyers during stock market selloffs and credit-risk events. The Great Financial Crisis of 2008 and the European debt debacle in 2011 are cases in point.
The macro regime flipped on a dime in 2022 when US inflation spiked to a 40-year high. The Fed was forced to raise interest rates, which caused bond prices to sink. Stocks, being discounting mechanisms, performed poorly as the era of free money quickly came to an end. In general, higher interest rates cause the present value of future cash flows and profits to decline.
The stock-bond correlation has cooled somewhat as 2025 has progressed, but it’s sort of like a dormant volcano or a sleeping giant of risk that could wake up at any time. Investors must prepare themselves by owning a truly diversified global portfolio. More on that to come.
Bonds Don’t Always Hedge Equity Risk
Source: BofA Global Research
The US Stock Market is Concentrated and No Bargain
We’ve spent a lot of time on the “40” of the 60/40, but what about the “60”? Stocks, after all, are the growth engine to help you reach your financial goals. As it stands, that engine is firing on just a few cylinders. The largest 10 S&P 500 stocks now account for 40% of the total index, the highest in decades. Additionally, they are all a similar play on tech and AI. To be clear, our team is bullish on this megatrend long-term, but that doesn’t justify going all-in on the current behemoths at current prices.
The S&P 500 probably deserves a premium price-to-earnings valuation multiple. Today, it's 23x, well above the long-term average (which is in the mid-to-high teens depending on the starting date). What does 23x tell us? Framing it against the bond market is a common approach. Here’s what we mean:
First, invert the P/E ratio into a percentage, and we get an “earnings yield” of 4.3%. Now, stocks are real investments, meaning they are claims on real assets and cash flows that generally include inflation. Thus, comparing the S&P 500’s earnings yield to the yield on inflation-adjusted Treasury notes is appropriate. Today, the 10-year TIPS (Treasury Inflation-Protected Securities) interest rate is 1.7%. Finally, subtract the TIPS yield of 1.7% from the earnings yield of 4.3% to arrive at the “equity risk premium” of 2.6%.
The equity risk premium (ERP) is the extra return an investor can expect to earn from investing in stocks (the S&P 500) compared to a default-risk-free Treasury note. 2.6% is historically paltry. It's better in the ex-US stock market, but rising interest rates are also compressing the ERP in many foreign markets.
S&P 500 Earnings Growth Concentrated Among the Largest Companies
Source: BlackRock
The 10 Largest US Stocks Account for 40% of the S&P 500 Index and Just 30% of Earnings
Source: Augur Infinity
S&P 500 Equity Risk Premium Very Low at 2.6%
Source: WisdomTree
Global Market-Implied Equity Risk Premiums Appear Better than the US, Still Low
Source: Goldman Sachs
The Dollar Could Trend Lower
Have we scared you away from investing yet? It gets worse! But take heart, we’ll deliver solutions when we wrap up. Adding to the litany of worries is the US dollar.
The greenback’s role as the world’s reserve currency has underpinned much of the demand for US sovereign debt and US-based assets more broadly. Once again, there are signs of strain, including debates about fiscal sustainability, trade policy frictions, and global discussions about de-dollarization or seeking more diversified reserve holdings.
If the dollar weakens materially (or if its reserve status is challenged), ex-US assets may benefit (both stocks and bonds abroad). Look no further than the first half of 2025—the dollar weakened by 10% against a basket of foreign currencies. Ex-US stocks soared, while hard assets priced in dollars became beacons of safety for risk-averse investors.
From a policy perspective, the Trump administration has made it clear that a weaker dollar is not necessarily a bad thing. Our team has studied the Mar-a-Lago Accord, reportedly hatched by Stephen Miran, President Trump’s former chair of the Council of Economic Advisers and now a fresh temporary voting member on the Federal Open Market Committee. It augurs for a gradual weakening of the dollar, extending the duration of US debt, and using tariffs to reduce budget deficits over time. If that comes to pass, we could see sustained strength in non-US dollar-denominated assets.
US Dollar Index -11% YTD, Pacing for One of Its Worst Years since 1986
Source: TradingView
Beyond 60/40: Where Diversification Lives Now
The 60/40 has revived itself in recent quarters, benefitting risk-conscious investors and those allocated to target-date retirement funds. Of course, the 60/40 isn’t dead; parts of it still work, especially in certain environments, for investors who don’t have the ability, willingness, and need to take 100% stock market risk. The key is adapting to today’s macro landscape and not making mere token shifts in asset weights to US stocks and bonds.
Next-generation portfolio construction looks beyond the 60/40 mix. Here’s how we go about it for investors at Allio:
Equity Strategy
Not all stocks are richly priced. US mid- and small-cap equities broadly feature mid-teens P/E ratios, and the same goes for non-US developed and emerging markets. A more robust 60/40 portfolio includes international diversification that can benefit from a sagging dollar and lower valuations.
For extra insight, we believe AI’s benefits will eventually trickle down to real-economy businesses (not just mega-cap tech firms), and that could subsequently pull small caps out of their years-long bear market. (The Russell 2000 remains below its November 2021 all-time high.) Sectors like Industrials, Health Care, and even Consumer Staples could all harness AI’s power to grow earnings and reward shareholders.
Beyond our borders, though we favor US stocks in general, we recognize that growth potential rests in many unloved ends of the earth. European stocks, emerging markets, and even Latin American countries have all performed well in 2025. We can’t rule out continued alpha there in the years ahead.
US Mid- and Small-Cap Stocks Just 15-17x Earnings
Source: Yardeni Research
Regional P/E Ratios: Better Value Overseas?
Source: Goldman Sachs
Smart Bond Allocations
Fixed income, while correlated with stocks since 2022, still has a place for some investors. The yield on the Bloomberg Aggregate Bond Index is 4.3% as of mid-September 2025. At the same time, US inflation swaps price in less than 3% inflation over the next five to 10 years, suggesting positive real returns in high-grade corporate credit and Treasurys.
We must be realistic about what fixed income may deliver, though. A 1-2% real yield (before taxes) with possibly no diversification benefit to stocks is not all that appealing. Corporate bonds are richly priced compared to historical interest rate spreads, too. So, most young investors with time horizons spanning decades should not hide out in Treasury bills, notes, and bonds.
US Inflation Swaps Point to 2.5-3% Inflation Over the Remainder of the Decade
Source: Augur Infinity
Interest-Earning Cash as Dry Powder
Cash is another tool—it must be wielded effectively, however. As the Fed lowers interest rates, cash is simply not sufficient to get investors to their goals. After accounting for inflation and taxes, there’s a good chance that cash will deliver negative returns. So, consider it as dry powder rather than a strategic allocation slice.
Commodities
Commodities have the potential to perform well this cycle. Crude oil commands a high weight in the benchmark Commodity Research Bureau (CRB) Index. Unfortunately for individuals with oil exposure, both WTI and Brent have been duds ever since inflation’s peak in mid-2022. Other spots, like copper, cocoa, and coffee, have performed better. Similar to bonds, a nuanced and independent approach is necessary when managing commodity exposure.
Real Estate
Real estate stocks, including Real Estate Investment Trusts (REITs), have lagged but could stage a comeback if interest rates drift lower and the economy remains on a decent footing. Unlike bonds, real estate can deliver both income and inflation protection and is less correlated to stocks in many macro regimes. The Real Estate Select Sector SPDR ETF (XLRE) is the worst-performing of the 11 S&P 500 sector funds over the past three years, so perhaps it falls into the “so bad, it’s good” category.
S&P 500 Sector ETF Returns Last 3 Years: Real Estate Worst, a Potential Value
Source: Koyfin Charts
Gold
Gold speaks for itself at this point. The precious metal, which we have embraced for years, has hit both nominal and inflation-adjusted all-time highs this year. A store of value for millennia, it can hedge against long-term inflation and a falling dollar. Don’t go all-in on the yellow metal, though, as its long-term return pales in comparison to stocks. And gold doesn’t pay any kind of income or dividend yield.
US Asset Long-Term Returns: Stocks Still Best (Gold a 1-2% Real Annual Return)
Source: Augur Infinity
Cryptocurrency
We have also advocated for investors to consider including cryptocurrencies, like bitcoin and ether, in their portfolio. Crypto’s role remains contentious, but as a diversifier, it offers unique exposure to emerging technology and alternative stores of value. US policy action has also turned more accepting of digital assets, including stablecoins, which could draw a new set of institutional demand. Of course, crypto is highly speculative and should be a supplementary sleeve, not a core one.
Bitcoin & Crypto Still Small Relative to Gold and the Global Financial Market
Source: Augur Infinity
The Right Recipe Given the Ingredients
Allio’s portfolios combine these asset classes to craft portfolios for investors with a range of risk and return objectives and time horizons. We believe that personalization and a macro approach to today’s complex markets can help steer investors through a winding global financial marketplace. Our ALTITUDE AI technology integrates predictive models and macro data to guide portfolio construction, manage risk, and deliver a tailored investing experience.
What’s the perfect dynamic macro portfolio recipe for you? Download our app and find out.
The Bottom Line
The 60/40 portfolio was an elegant solution for an era of negative stock-bond correlations, steady growth, and concentrated US outperformance. But in 2025, macro challenges demand a more thoughtful approach. The path forward is not rejecting 60/40 entirely, but evolving it: building in broader diversification, more dynamic allocation, and a willingness to look globally and across asset classes. Are you ready to invest smarter?
Beyond the 60/40: Why the Classic Investment Blend Is More Challenged Today — and What to Do
The traditional 60/40 portfolio has recovered from turmoil earlier this decade
New risks have emerged, requiring critical thinking among investors and thoughtful allocation methods
We outline why a dynamic macro portfolio can be an effective solution to help individuals confidently reach their goals
Financial pundits have been outspoken about the risks associated with the traditional 60/40 portfolio. The allocation of 60% US stocks and 40% US bonds came under attack during the post-COVID inflation shock and subsequent fixed-income bear market. “The 60/40 is dead,” decried its detractors. But guess what happened? This so-called “balanced” investing approach actually performed quite well.
From the bear-market low in the stock market in October 2022 through much of 2025’s third quarter, the S&P 500 returned more than 90%. The US aggregate bond market delivered a nearly 20% total return in that stretch. Gains since October 2023 were likewise impressive, to the tune of 55% for the S&P 500 Total Return Index and 16% for the Bloomberg Aggregate Bond Index.
Stocks and Bonds Have Rallied Since October 2022
Source: Stockcharts.com
The result? The tried-and-true 60/40 was not only “not dead,” but it seemed as alive and kicking as ever by late 2025.
Key to the 60/40’s impressive performance was the resilient confidence global investors placed in the US bond market. It’s something we detailed shortly after Liberation Day, when some critics contended that US exceptionalism was dead and that foreign markets were set to outperform in a major way and for an extended period. The yield on the benchmark 10-year Treasury rate fell from near 5% to 4% from May through September 2025, just as the US Federal Reserve resumed its rate-cutting cycle.
Bonds are just the “40” in the 60/40 portfolio, however. The “60” stock sleeve has performed well in the past, led by certain companies since the October 2022 bear-market bottom. Past performance is not indicative of future results. Newcomers have boosted US large-cap returns, including NVIDIA (NVDA) rival Broadcom (AVGO) and Larry Ellison’s Oracle (ORLC). Now sporting a 20% compounded annualized growth rate (CAGR) since early Q4 2022, the S&P 500 boasts a premium price-to-earnings (P/E) multiple and high concentration in its top 10 positions.
The S&P 500’s P/E Ratio is Near 23x
Source: FactSet
The traditional 60/40 portfolio may have been put to pasture by some portfolio managers in the wake of Biden-era inflation, but it’s clearly not dead based on historical returns. Here’s the question investors must grapple with today: Will the 60/40 keep churning out consistent annualized returns of 10%-plus?
It’s hard to justify that it will. What’s more, today’s macro risks augur for a better, more holistic approach. Yes, US large-cap stocks and investment-grade bonds have a place, but so too do asset classes like commodities, real estate, gold, and cryptocurrency.
Let’s flesh out a better method to “balanced” investing in today’s dynamic world of new products, new pitfalls, and new opportunities.
60/40: The Background on a Time-Tested Portfolio Strategy
For decades, the 60/40 has been the bedrock of many investors’ allocations. It’s simple: stocks provide growth, bonds provide income and act as a hedge against market downturns. The result since the early 1980s has been stellar risk-adjusted returns, especially when bonds moved inversely to stocks. That was then.
Stocks Have Done the 60/40’s Heavy Lifting
Source: Apollo Global
One thing about markets is that correlations don’t hold indefinitely. Regimes change, and investors are forced to confront the shifts in order to manage risk. Today, we are in an inflationary regime, which often means stocks and bonds move together. The benchmark 60/40 portfolio endured historic losses in 2022, and with little warning.
60/40 Losses Can Be Devastating
Source: Ray Dalio
Jump ahead to today, and despite the bond market’s recovery and falling interest rates (remember that bond prices move opposite to bond interest rates), cracks are forming:
The correlation between the S&P 500 and US Treasurys is now structurally higher than it was from the mid-1990s through the pre-COVID era.
The S&P 500 is concentrated.
Other asset classes are emerging.
At Allio, we believe in a smarter, more independent mindset to combat modern risks. It includes having exposure to other asset classes and embracing a dynamic macro portfolio approach—not one that merely sits back and accepts market returns.
US Stocks and Treasurys Have Turned Positively Correlated in the 2020s
Source: BlackRock
The New Challenges Facing Bonds, Stocks, and the 60/40 Regime
Foundational relationships that were once the linchpin to traditional investment management have been broken, making portfolios significantly riskier now compared to, say, a decade ago.
But it doesn’t feel that way, right? The S&P 500 has logged dozens of new record highs this year, while the bond market has bucked consensus expectations for modest (or even negative) returns. As they say in the financial world, past performance is no guarantee of future results, and four key challenges are right in front of all of us.
Global Bond Market Risks Are Mounting
The US Treasury market is the best house in a bad neighborhood. It’s the cleanest shirt in a dirty laundry basket. Call it what you will, but amid the media fearmongering after President Trump’s tariffs went into effect and Congress passed the One Big, Beautiful Bill Act (OBBBA), US credit held strong. Long-term interest rates at home wobbled, but ultimately retreated, reaffirming the US's good standing in the financial market world.
The same cannot be said for global sovereign bond arenas. 30-year interest rates in Japan, Germany, the UK, and France are at decade-plus highs (Japan’s even at an all-time high). That means investors have been selling international bonds en masse. Why? Increasing debt burdens.
Push is coming to shove across the developed world outside our borders. Budget deficits are wide, GDP growth is sluggish, and less globalization means those nations must stand on their own (with less support and financial handouts from the US). Large institutional investors are voting with their feet, reallocating away from international long-term bonds.
The US Treasury market has bucked the trend so far. Yes, there have been moments of “yips” with the 30-year long-bond, but Treasury volatility has settled down. The risk is that what’s happening overseas eventually manifests itself in the US fixed-income world. Given that the US national debt is on the doorstep of $40 trillion and annual budget deficits could still be in the trillions going forward, policy uncertainty is high.
Just look at price action. Global yield curves have steepened, meaning that long-term interest rates have increased relative to short-term rates. In many cases, it has been a “bear steepener,” in which long-dated bonds fall in value. Moreover, the so-called “term premium” embedded in the bond market has jumped, underscoring perceived systemic uncertainty.
Global Interest Rates Rising
Source: Koyfin Charts
The list of concerns related to today’s government bond market is long, despite corporate credit quality looking excellent. The problem there is that “yield spreads,” the extra interest rate amount earned for taking on riskier corporate bonds versus Treasurys, is near the tightest level since the late 1990s.
In short, there’s not much juice left to squeeze by stepping out on the credit risk curve either. As a reminder, the high-yield bond market often acts more like the stock market than the bond market, so it does a portfolio little good to load up on “junk” bonds.
Investment-Grade Corporate Credit Spreads Near Century-Lows
Source: FRED
Stock-Bond Correlations are Increasing
Indeed, the list of landmines in the fixed-income world is gaudy right now. Perhaps as a result, bonds trade like risky instruments rather than a safe haven. Historically, high-grade bonds (namely Treasurys) provided negative or low correlation with stocks, helping cushion equity losses. But since the inflation shocks post-COVID, and with the aforementioned macro forces in play, there have been periods of positive correlation, meaning both stocks and bonds fall together.
For the 60/40 portfolio, risk reduction is greatly diminished when both pieces move together. (Ideally, stocks zig when bonds zag, and vice versa.) You might wonder why stock-bond correlations have increased in recent years compared to previous decades.
It really boils down to inflation. When investors fear jumpy inflation and higher interest rates, the bond-market tail can wag the stock-market dog. Conversely, amid low-inflation or even deflationary regimes, bonds are the safety trade—they attract buyers during stock market selloffs and credit-risk events. The Great Financial Crisis of 2008 and the European debt debacle in 2011 are cases in point.
The macro regime flipped on a dime in 2022 when US inflation spiked to a 40-year high. The Fed was forced to raise interest rates, which caused bond prices to sink. Stocks, being discounting mechanisms, performed poorly as the era of free money quickly came to an end. In general, higher interest rates cause the present value of future cash flows and profits to decline.
The stock-bond correlation has cooled somewhat as 2025 has progressed, but it’s sort of like a dormant volcano or a sleeping giant of risk that could wake up at any time. Investors must prepare themselves by owning a truly diversified global portfolio. More on that to come.
Bonds Don’t Always Hedge Equity Risk
Source: BofA Global Research
The US Stock Market is Concentrated and No Bargain
We’ve spent a lot of time on the “40” of the 60/40, but what about the “60”? Stocks, after all, are the growth engine to help you reach your financial goals. As it stands, that engine is firing on just a few cylinders. The largest 10 S&P 500 stocks now account for 40% of the total index, the highest in decades. Additionally, they are all a similar play on tech and AI. To be clear, our team is bullish on this megatrend long-term, but that doesn’t justify going all-in on the current behemoths at current prices.
The S&P 500 probably deserves a premium price-to-earnings valuation multiple. Today, it's 23x, well above the long-term average (which is in the mid-to-high teens depending on the starting date). What does 23x tell us? Framing it against the bond market is a common approach. Here’s what we mean:
First, invert the P/E ratio into a percentage, and we get an “earnings yield” of 4.3%. Now, stocks are real investments, meaning they are claims on real assets and cash flows that generally include inflation. Thus, comparing the S&P 500’s earnings yield to the yield on inflation-adjusted Treasury notes is appropriate. Today, the 10-year TIPS (Treasury Inflation-Protected Securities) interest rate is 1.7%. Finally, subtract the TIPS yield of 1.7% from the earnings yield of 4.3% to arrive at the “equity risk premium” of 2.6%.
The equity risk premium (ERP) is the extra return an investor can expect to earn from investing in stocks (the S&P 500) compared to a default-risk-free Treasury note. 2.6% is historically paltry. It's better in the ex-US stock market, but rising interest rates are also compressing the ERP in many foreign markets.
S&P 500 Earnings Growth Concentrated Among the Largest Companies
Source: BlackRock
The 10 Largest US Stocks Account for 40% of the S&P 500 Index and Just 30% of Earnings
Source: Augur Infinity
S&P 500 Equity Risk Premium Very Low at 2.6%
Source: WisdomTree
Global Market-Implied Equity Risk Premiums Appear Better than the US, Still Low
Source: Goldman Sachs
The Dollar Could Trend Lower
Have we scared you away from investing yet? It gets worse! But take heart, we’ll deliver solutions when we wrap up. Adding to the litany of worries is the US dollar.
The greenback’s role as the world’s reserve currency has underpinned much of the demand for US sovereign debt and US-based assets more broadly. Once again, there are signs of strain, including debates about fiscal sustainability, trade policy frictions, and global discussions about de-dollarization or seeking more diversified reserve holdings.
If the dollar weakens materially (or if its reserve status is challenged), ex-US assets may benefit (both stocks and bonds abroad). Look no further than the first half of 2025—the dollar weakened by 10% against a basket of foreign currencies. Ex-US stocks soared, while hard assets priced in dollars became beacons of safety for risk-averse investors.
From a policy perspective, the Trump administration has made it clear that a weaker dollar is not necessarily a bad thing. Our team has studied the Mar-a-Lago Accord, reportedly hatched by Stephen Miran, President Trump’s former chair of the Council of Economic Advisers and now a fresh temporary voting member on the Federal Open Market Committee. It augurs for a gradual weakening of the dollar, extending the duration of US debt, and using tariffs to reduce budget deficits over time. If that comes to pass, we could see sustained strength in non-US dollar-denominated assets.
US Dollar Index -11% YTD, Pacing for One of Its Worst Years since 1986
Source: TradingView
Beyond 60/40: Where Diversification Lives Now
The 60/40 has revived itself in recent quarters, benefitting risk-conscious investors and those allocated to target-date retirement funds. Of course, the 60/40 isn’t dead; parts of it still work, especially in certain environments, for investors who don’t have the ability, willingness, and need to take 100% stock market risk. The key is adapting to today’s macro landscape and not making mere token shifts in asset weights to US stocks and bonds.
Next-generation portfolio construction looks beyond the 60/40 mix. Here’s how we go about it for investors at Allio:
Equity Strategy
Not all stocks are richly priced. US mid- and small-cap equities broadly feature mid-teens P/E ratios, and the same goes for non-US developed and emerging markets. A more robust 60/40 portfolio includes international diversification that can benefit from a sagging dollar and lower valuations.
For extra insight, we believe AI’s benefits will eventually trickle down to real-economy businesses (not just mega-cap tech firms), and that could subsequently pull small caps out of their years-long bear market. (The Russell 2000 remains below its November 2021 all-time high.) Sectors like Industrials, Health Care, and even Consumer Staples could all harness AI’s power to grow earnings and reward shareholders.
Beyond our borders, though we favor US stocks in general, we recognize that growth potential rests in many unloved ends of the earth. European stocks, emerging markets, and even Latin American countries have all performed well in 2025. We can’t rule out continued alpha there in the years ahead.
US Mid- and Small-Cap Stocks Just 15-17x Earnings
Source: Yardeni Research
Regional P/E Ratios: Better Value Overseas?
Source: Goldman Sachs
Smart Bond Allocations
Fixed income, while correlated with stocks since 2022, still has a place for some investors. The yield on the Bloomberg Aggregate Bond Index is 4.3% as of mid-September 2025. At the same time, US inflation swaps price in less than 3% inflation over the next five to 10 years, suggesting positive real returns in high-grade corporate credit and Treasurys.
We must be realistic about what fixed income may deliver, though. A 1-2% real yield (before taxes) with possibly no diversification benefit to stocks is not all that appealing. Corporate bonds are richly priced compared to historical interest rate spreads, too. So, most young investors with time horizons spanning decades should not hide out in Treasury bills, notes, and bonds.
US Inflation Swaps Point to 2.5-3% Inflation Over the Remainder of the Decade
Source: Augur Infinity
Interest-Earning Cash as Dry Powder
Cash is another tool—it must be wielded effectively, however. As the Fed lowers interest rates, cash is simply not sufficient to get investors to their goals. After accounting for inflation and taxes, there’s a good chance that cash will deliver negative returns. So, consider it as dry powder rather than a strategic allocation slice.
Commodities
Commodities have the potential to perform well this cycle. Crude oil commands a high weight in the benchmark Commodity Research Bureau (CRB) Index. Unfortunately for individuals with oil exposure, both WTI and Brent have been duds ever since inflation’s peak in mid-2022. Other spots, like copper, cocoa, and coffee, have performed better. Similar to bonds, a nuanced and independent approach is necessary when managing commodity exposure.
Real Estate
Real estate stocks, including Real Estate Investment Trusts (REITs), have lagged but could stage a comeback if interest rates drift lower and the economy remains on a decent footing. Unlike bonds, real estate can deliver both income and inflation protection and is less correlated to stocks in many macro regimes. The Real Estate Select Sector SPDR ETF (XLRE) is the worst-performing of the 11 S&P 500 sector funds over the past three years, so perhaps it falls into the “so bad, it’s good” category.
S&P 500 Sector ETF Returns Last 3 Years: Real Estate Worst, a Potential Value
Source: Koyfin Charts
Gold
Gold speaks for itself at this point. The precious metal, which we have embraced for years, has hit both nominal and inflation-adjusted all-time highs this year. A store of value for millennia, it can hedge against long-term inflation and a falling dollar. Don’t go all-in on the yellow metal, though, as its long-term return pales in comparison to stocks. And gold doesn’t pay any kind of income or dividend yield.
US Asset Long-Term Returns: Stocks Still Best (Gold a 1-2% Real Annual Return)
Source: Augur Infinity
Cryptocurrency
We have also advocated for investors to consider including cryptocurrencies, like bitcoin and ether, in their portfolio. Crypto’s role remains contentious, but as a diversifier, it offers unique exposure to emerging technology and alternative stores of value. US policy action has also turned more accepting of digital assets, including stablecoins, which could draw a new set of institutional demand. Of course, crypto is highly speculative and should be a supplementary sleeve, not a core one.
Bitcoin & Crypto Still Small Relative to Gold and the Global Financial Market
Source: Augur Infinity
The Right Recipe Given the Ingredients
Allio’s portfolios combine these asset classes to craft portfolios for investors with a range of risk and return objectives and time horizons. We believe that personalization and a macro approach to today’s complex markets can help steer investors through a winding global financial marketplace. Our ALTITUDE AI technology integrates predictive models and macro data to guide portfolio construction, manage risk, and deliver a tailored investing experience.
What’s the perfect dynamic macro portfolio recipe for you? Download our app and find out.
The Bottom Line
The 60/40 portfolio was an elegant solution for an era of negative stock-bond correlations, steady growth, and concentrated US outperformance. But in 2025, macro challenges demand a more thoughtful approach. The path forward is not rejecting 60/40 entirely, but evolving it: building in broader diversification, more dynamic allocation, and a willingness to look globally and across asset classes. Are you ready to invest smarter?
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