Beyond 60/40: Balancing risk, not asset classes.

Column Whether an investor was in long-dated bonds, Tesla stock or FTX, 2022 provided a sobering reminder that economic regimes change. Investors were lucky that for the past several decades declining inflation and falling interest rates made a 60/40 portfolio appear consistently attractive. For example, 10-year real yields have risen to 1.6% at the start of 2023 from -1% at the beginning of 2022, which means those holding inflation-indexed bonds are receiving yields not seen since before the 2008-09 financial crisis. [Extracted from the article]