Do You Have a Zombie Portfolio? 

QUESTION: Is the 60/40 portfolio dead? 

ANSWER: For those unfamiliar with the term, a 60/40 portfolio is one roughly invested 60% in stocks and 40% in bonds. Back in the days before digital calculators, investment gurus decided that 60/40 was the prudent mix for most institutional investors. They believed this blend had enough equities to allow growth in good times and adequate fixed income to provide stability and income during downturns. For decades that has been the standard investment split for most pension funds and insurance companies, their multi-billion-dollar portfolios plodding along in zombie-like fashion.  

But last year, for a brief time, stock and bond markets dropped at the same time as interest rates and inflation climbed upward, prompting many to ask if the 60/40 portfolio was an anachronism, a dead strategy? Perhaps the better question is: Was it ever alive, a viable strategy for maximizing investment returns? 

Long before this age when everyone has a computer in their pocket, AMG recognized that such rules of thumb are oversimplified and that clients are better served with more dynamic approaches.  

Over the past 50 years, through bull and bear markets, AMG has developed proprietary techniques for optimizing portfolio returns while managing risk. AMG continually updates its economic and financial research and refines its investment models to help clients more thoughtfully allocate their resources and manage risk as they work to achieve their financial goals.  

So is the 60/40 portfolio alive, dead or just the walking dead? Honestly, you should probably ask someone else because we at AMG are too focused on the future to worry about cliché solutions.