The classic 60-40 market portfolio — with 60% in stocks and 40% in bonds — has come under serious scrutiny in recent years, with major changes in the bond market leading to fundamental questions about the traditional approach to long-term retirement income planning. But for investors with the goal of financial security as they age, this year’s stock market volatility sent some to take another look at the concept. That’s a mistake, says Ric Edelman, the former head of Edelman Financial Engines.
Edelman says it’s not the bond market that killed the 60-40 portfolio. Rather, it’s us humans. And this year’s market volatility shouldn’t send investors running back to the concept as a long-term fix.
With the average lifespan increasing, and breakthroughs in health and science expected to increase in the years ahead, too, Edelman says that the 60-40 portfolio cannot possibly provide investors with enough money for a longer life.
“It’s dead…
