Investor Bondage: The End Of The 60/40 Portfolio?

When Mike Tyson was asked if he was concerned about Evander Holyfield’s fight plan for their impending match, he said: “Everyone has a plan until they get punched in the mouth.” For bond investors, the recent rout must feel like getting punched. The no-brainer asset allocation of 60/40, equities and bonds, has, for the past 40 years, returned a compound annual growth rate of 10.2 per cent (U.S.). 1 Sadly, that kind of return may be a quaint artifact—like...