Why 60/40 Stocks/Bonds is Not for Everyone

The ubiquitous 60/40 stock/bond solution is wrong for many, especially baby boomers.

For decades, the “go-to” asset allocation used by most investment advisors is 60% in equities and 40% in bonds, but this is a stupid choice for many investors. Asset allocation is the most important investment decision because it explains 100% of investment performance.

Check your own asset allocation. Is it 60/40 or near that ratio? Why?

The Employee Benefit Research Institute (EBRI) reports that the average IRA account is 60/40 regardless of age. Also, the $3 trillion in target-date fund investments is 60/40 at the target date. 60/40 is ubiquitous, and it’s stupid because it’s just not right for everyone. Nothing is a true “Goldilocks portfolio.

Field of Study: Finance