Down But Not Out

Creating a portfolio with an asset allocation between stocks, bonds, and cash that is right for you can be a complicated process.

It doesn’t have to be.

Asset allocation simply means dividing up your assets in the right proportions among stocks, bonds, and cash to maximize your chances of achieving your financial goals with a minimum amount of investment risk.

Over the years, a seemingly fail-safe default allocation chosen by many investors has been the widely popular 60-40 stock/bond portfolio.

Not this year.

Responding to rampant inflation, the Federal Reserve initiated the largest six-month interest rate increase in 41 years, causing the overall bond market to decline more than 14% in 2022.

Combine this with a stock market decline of over 20%, and it is no wonder many in the financial press are proclaiming the “death” of the 60/40 portfolio.

Is it time to abandon this simple allocation?

Maybe. Maybe not.

Take a moment and read this article by Dimensional Fund Advisors that puts 2022’s market decline in perspective. Instead of calling for its demise, a strong case is made for staying invested and capturing the expected future returns of this timeless allocation.

Build a Plan With Confidence

If you are unsure of your portfolio allocation in the midst of our current market, let's connect. We can build a plan that provides peace of mind, even during times of volatility.