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So far, 2021 hasn’t been a great year for either side of the conventional 60/40 portfolio.
Stocks, as measured by the S&P 500 SPX, have dropped 6% this year. Bonds, as measured by the S&P U.S. government bond index, also have dropped 6% this year. And looking at the longer term, future stock-market returns may be lower due to elevated valuations and slowing growth, and bond returns could struggle in a new inflationary environment, making the historical roughly 8% annual return for the 60/40 portfolio tough to achieve.
David…
