Is the 60/40 portfolio living up to its reputation of resilience this year? The merit of a classic portfolio of 60% stocks and 40% bonds has been a matter of debate in recent years. A diversified 60/40 strategy failed to protect investors in 2022’s broad market crash—in fact, an all-stock portfolio would have held up better. However, a historical deep dive from Morningstar concluded that the tried-and-true approach lessened the pain in almost all of the worst market crashes in 150 years better than an all-stock portfolio. Morningstar Inc Portfolio Strategist Amy Arnott discusses the 60/40 portfolio’s ups and downs and its performance in 2025.

On this episode:

What is a 60/40 portfolio, and why is it popular? 

We often hear claims that the 60/40 portfolio is “dead” or obsolete. Why does it get criticized so much? 

Some of that criticism flared up in 2022. Why was the performance so bad for the 60/40 portfolio that year? 

Volatility has rocked the markets in 2025. How has the classic investment strategy done so far this year? 

Are there any asset classes that have performed better so far in 2025? Why? 

And which ones have struggled? 

Interest rates are sitting above 4%, but market watchers are anticipating the Federal Reserve will cut rates in September. What could that mean for the fixed-income part of the 60/40 portfolio? 

How do you think the 60/40 portfolio will perform over the next few years? 

Should people still rely on the 60/40 portfolio, or is another strategy better like the 70/30 or 50/30/20, which can be a mix of stocks, bonds, and alternatives? 

The tried-and-true strategy has proved its worth. So, what’s the final takeaway for current retirees, future retirees, or anyone seeking less risk?

Read about topics from this episode.  

The 60/40 Portfolio: A 150-Year Markets Stress Test

Is the 60/40 Portfolio Feeling ’22?

What We’ve Learned From 150 Years of Stock Market Crashes

How Does Your 60/40 Portfolio Allocation Compare With the Pros?

Why 2025 Is the Year to Invest in International Stocks

Why It’s Not Too Late to Add International Exposure

Why Holding Assets Outside the US Dollar Has Paid Off in 2025

How to Use Gold in Your Portfolio

Portfolio Diversification Is Winning in 2025

 

What to watch from Morningstar. 
These 16 Standout Funds Are Making Big Bets. Do They Fit in Your Investment Portfolio?

Market Volatility: Investors Are Seeking Safety in Gold ETFs. Is It Working?

Why Bonds Belong in Your Diversified Portfolio (Even Now)

Covered-Call ETFs Are Booming. But Not All Yield Is Good

 

Read what our team is writing.

Amy Arnott

Ivanna Hampton

 

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