The Classic 60-40 Investment Strategy Faces its Most Challenging Year in Decades

Posted on November 20th, 2023 at 11:40 AM
The Classic 60-40 Investment Strategy Faces its Most Challenging Year in Decades

From the desk of Jim Eccleston at Eccleston Law 

Millions of Americans are experiencing disruption in their retirement planning due to rising interest rates and inflation.

For generations, financial advisors promoted the 60–40 strategy as the ultimate investment approach for ordinary people. The concept is straightforward: holding stocks during prosperous times aids in wealth accumulation. When stocks experience a downturn, bonds usually offer a more stable performance, softening the impact.

However, that is no longer the case. The reliable 60–40 portfolio experienced a 17 percent loss last year, marking its worst performance since at least 1937, as reported by the Wall Street Journal.

In response, advisors are considering other options. Those include money-market funds over bonds or substituting a portion of their S&P 500 allocation with international stocks or shares of smaller companies. Other advisors are exploring alternatives to stocks and bonds, often involving riskier investments with higher fees. Those alternatives include real estate, commodities, or corporate loans.

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law

Return to Archive

TESTIMONIALS

Previous
Next

I have the best legal firm in the country to defend me. Awesome job!

Cindy C.

LATEST NEWS AND ARTICLES

July 26, 2024
Kentucky Advisor Sues LPL Financial for Alleged Corporate Raid

A Kentucky advisor, Mark Lamkin, has filed a lawsuit against LPL Financial, claiming the independent broker-dealer orchestrated a corporate raid that resulted in the loss of his firm’s entire book of managed assets.

July 25, 2024
FINRA Plans Fee Increases Amid Rising Costs and Losses

The Financial Industry Regulatory Authority (FINRA) has announced plans to raise fees for its approximately 3,300 broker-dealer member firms. According to AdvisorHub, the self-regulator faces soaring costs, as detailed in its annual report published at the end of June.

July 24, 2024
Raymond James Settles with Oregon Over Excessive Commissions

Raymond James recently settled a case with Oregon's Division of Financial Regulation (“DFR”), agreeing to pay nearly $200,000 over allegations of charging excessive commissions to retail investors.