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This 'Sleep Like a Baby' Portfolio Strategy Is Having Its Best Year in Nearly a Century, BofA's Hartnett Says

Forget the 60/40 portfolio: Investors have had a much better option this year to get better diversification and stronger returns.

This 'Sleep Like a Baby' Portfolio Strategy Is Having Its Best Year in Nearly a Century, BofA's Hartnett Says

TL;DR

  • A four-way portfolio split (stocks, bonds, cash, commodities) is performing better than the traditional 60/40 portfolio in 2026.
  • This 'sleep like a baby' portfolio is having its best year since 1933 and its third largest outperformance over the 60/40 allocation.
  • Commodities, particularly natural resources, are recommended due to strong returns, partly influenced by geopolitical conflicts.
  • The strategy benefits from themes like economic boom narratives, potential China-US trade détente, geopolitical needs for strategic resources, and a recovering tech sector anticipating major IPOs.
  • Despite strong stock market performance, sentiment is not overheated as futures traders are hedging against potential equity weakness.

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