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RL141 — Is The 60/40 Portfolio Dead?

On the Retirement Lifestyle Show, Roshan Loungani, Eric Olson, and Adrian Nicholson discuss whether the 60/40 portfolio is dead. They analyze how the traditional framework is catching heat with both equities and bonds down this year and some alternative investment options you can take advantage of. Listen now to learn Is The 60/40 Portfolio Dead?

[00:59] Introduction

[04:36] Is the 60/40 Portfolio Dead?

[07:07] Understanding the Client-Advisor Relationship

[09:10] Some Better Alternatives to the 60/40 Portfolio

[12:05] Historical Spectrum of Returns in the 60/40 Portfolio

[15:15] Worst-Performing Years in the 60/40 Portfolio

[23:15] The Stock/Bond Correlation

[27:25] Normal Vs Abnormal Stock/Bond Correlation

[29:30] A Personalized Approach to Investing

[31:10] When Both Bonds and Stocks Go Up or Down in the Same Year

[33:30] Attractive Bond Substitutes

[36:10] The 60/20/20 Portfolio of Stocks, Bonds, and Alternatives

[37:10] Identifying Opportunities When Trading Options

[40:28] Parting Thoughts

To read the Full Show Notes scroll down or click here.

  • Roshan Loungani can be reached at roshan.loungani@aretewealth.com or at 202-536-4468.
  • Erik Olson can be reached at erik.olson@aretewealth.com or 815-940-4652.
  • Adrian Nicholson can be reached at adrian.nicholson@aretewealth.com or at 703-915-8905

Listen now to learn Is The 60/40 Portfolio Dead?

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Is The 60/40 Portfolio Dead

Full Show Notes:

Is the 60/40 portfolio really dead?

The traditional 60/40 approach to investing has been a mainstay for most Americans, but it may be time to revisit how we plan for our future. This investment balance was designed to protect investors against uncertainties in the equity markets by keeping more than one-third of a portfolio in bonds. So the big question is, is the traditional 60/40 portfolio dead? The even more important question is, should retirees continue to have faith in the 60/40 portfolio? For starters, it would be best to review why investors are urged to have a healthy stock/bond allocation in their portfolio. The most important reason is the low correlation between stocks and bonds. However, the post-pandemic investment climate has been brutal for investors as both stocks and bonds tanked. 

Although bonds and stocks are down this year, investors should not be too quick to drop this tried and tested strategy. Instead of thinking of the recent slump as a death sentence, investors should see it as a hibernation. Investment strategies run in cycles, and this, too, shall pass.

Disclaimer Welcome, you are now listening to the retirement lifestyle show with Roshan Loungani Erik Olson and Adrian Nicholson. This show is an exploration of ideas to help you work towards your ideal retirement. Roshan Loungani and Erik Olson serve clients across the US. They offer financial planning and investment advice through Arete Wealth Advisors, LLC, an SEC registered investment advisor and securities through Arete Wealth Management LLC, member FINRA, SIPC, and NFA. Get ready for the financial independence of your dreams. All opinions expressed by podcast hosts and guests are solely their own are based on information they believe is reliable. Neither Arete Wealth nor its affiliates, warrants its completeness or accuracy, nor do their opinions reflect the opinion of Arete Wealth. This podcast is for general informational purposes only and should not be regarded as specific advice or recommendations for any individual. Before making any decisions consult a professional. Finally, our music is the chance by Jason Shaw and Audionautix. It’s part of the YouTube Audio Library and it’s licensed under a Creative Commons license.

Thank you for listening.

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