economy

January 11, 2026

The classic 60/40 strategy makes sense for investors again

Some expect it could be time to adapt the traditional portfolio once more, now that fixed income is compelling again.

The classic 60/40 strategy makes sense for investors again

TL;DR

  • The 60/40 portfolio (60% stocks, 40% bonds) is seeing renewed interest.
  • Near-zero interest rates and the 2022 market downturn had reduced its popularity.
  • The iShares Core U.S. Aggregate Bond ETF (AGG) showed a 7.2% total return in 2025, its best since 2020.
  • Anticipated Fed rate cuts could boost bond prices and appeal.
  • Stock market vulnerabilities, including high valuations and AI bubble concerns, make fixed income attractive for risk mitigation.
  • Experts suggest holding bonds with longer durations (six to seven years) and a mix of credit, Treasurys, and mortgage-backed securities.
  • Some propose alternative assets like private credit and commodities (gold) for the 40% allocation.
  • Commodities like gold have also seen strong interest and rallies in early 2026.

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