Articles from Barron’s, Kiplinger, and other financial outlets splashed headlines trumpeting the investment strategy’s demise.Before we declare the 60/40 dead, let’s take a closer look at the subject. A 60/40 portfolio is one that is made up of 60% stocks and 40% bonds. While it can be made up of individual stocks and bonds, in most cases portfolios will use diversified investments such as mutual funds and ETFs to follow this strategy.
One poor year a bad strategy does not make. One year of below average performance does not augur that markets will continue to perform this way. If anything, it may be a better time to use a 60/40 strategy than the last few years. Keep these thoughts in mind when deciding whether the 60/40 may make sense for you despite last year’s performance.If you want to know how much interest a bond fund pays, a good place to start is the SEC yield.