Allison Schrager, Columnist

The 60/40 Portfolio Isn't Dead, Just More Expensive

Split your investments any way you like, just be ready to pay a lot more to find safety in this market.

October 18, 2021 at 6:00 AM EDT

Allison Schrager is a Bloomberg Opinion columnist covering economics. A senior fellow at the Manhattan Institute, she is author of “An Economist Walks Into a Brothel: And Other Unexpected Places to Understand Risk.”

A monitor displays stock market information on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Friday, Nov. 9, 2018. U.S. stocks slumped as investors considered what a tumble in oil prices means for the economy, while a fresh batch of weak tech earnings weighed on the high-flying sector.Photographer: Bloomberg/Bloomberg

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Volatile, pandemic-riven markets for stocks and bonds has Wall Street ready — again — to declare the traditional 60/40 portfolio split a dead strategy. The prospect of a low-growth, high-inflation economy (stagflation) dims the prospects of both investment categories, and certainly demands a rethink of where to stash your savings.

The big banks already are offering advice on alternatives; I’ve got some of my own. But for investors seeking robust-but-safe returns, there’s really just one option: be prepared to take on more risk.

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