Why the 60/40 Rule No Longer Works — And What to Do Instead
The classic 60% stocks / 40% bonds portfolio isn’t protecting investors like it used to. Here’s why:
1️⃣ Stocks & Bonds Move Together Now
In 2022, both fell at the same time for the first time ever — breaking the negative correlation the 60/40 strategy depended on. Bonds also face pressure from rising debt, inflation, and USD concerns.
2️⃣ Bond Returns Are Too Low
A 4–5% yield sounds fine, but after inflation and taxes, real returns often drop to near zero or negative.
3️⃣ Stock Market Volatility Is Rising
Geopolitics, inflation, and AI disruption make markets more unpredictable than past decades.
📌 A Smarter Approach: Real Diversification
Instead of relying only on stocks and bonds, spread investments across different asset classes:
Own Business – highest growth potential
Real Estate – cash flow + tax benefits
Stocks – ETFs + selective picks
Speculative (Crypto/Startups) – small %
Gold – inflation hedge
This way, when one market crashes, others can still support your wealth.
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