The short answer: no, 60/40 is not dead — but the reason it worked for two decades is gone, and that changes how you should build it. The 60/40 portfolio was never a magic ratio. It was a bet that when stocks fall, bonds rise. That bet stopped paying in 2022, and understanding why matters more than picking a new number.
The classic 60/40 portfolio holds 60% equities and 40% bonds. Its appeal was never the returns of the bond sleeve. It was the correlation: for most of the period between roughly 2000 and 2021, stocks and high-quality government bonds tended to move in opposite directions. When equities sold off, bonds rallied, and the portfolio fell less than the market did.
In 2022, both fell at the same time. That was unusual — but it was not random. Stock-bond correlation is not a constant. It flips depending on what is driving markets:
That second regime is not new. It was the norm through much of the 1970s and 1980s. What was unusual was the twenty-year stretch of reliably negative correlation that trained an entire generation of investors — and an entire generation of portfolio software — to treat 40% bonds as automatic protection.
The ratio was always arbitrary. Nothing about 60/40 is mathematically special; it is a convention that became a default. Arguing about whether it should now be 70/30 or 50/30/20 misses the point.
The useful question is not "what is the right number" but "what job is each part of my portfolio doing, and is it still doing it?" A 60/40 portfolio has three jobs baked into it: grow capital, dampen drawdowns, and produce income. In the 2000–2021 regime, the bond sleeve did all three at once. Today it does them unevenly, so they are worth separating.
Duration — the sensitivity of a bond to interest-rate moves — is protection against a growth shock and a liability during an inflation shock. If your bond sleeve is entirely long-duration government debt, you are well hedged against a recession and poorly hedged against a repeat of 2022.
Diversifiers that behave differently under inflation include short-duration bonds, inflation-linked bonds, and real assets. None is free: short duration gives up the rally you would get in a recession, and real assets carry their own volatility.
This is the part of the debate that changed most. For much of the 2010s, the bond sleeve offered almost no yield, so it was pure insurance with a negative carry. With yields meaningfully above zero, fixed income has a return case on its own merits rather than only a diversification case.
That is a real argument for holding bonds that did not exist five years ago — and it is often missing from articles declaring 60/40 dead.
Correlation regimes last years, not decades. If your horizon is thirty years, a bad correlation year is noise. If you are drawing income from the portfolio within five, a simultaneous drawdown in both sleeves is the specific risk that ends plans — the sequence-of-returns problem.
The same allocation can be entirely reasonable for one investor and clearly wrong for another. This is why "is 60/40 dead" has no general answer.
Not a recommendation — a description of how the debate has actually moved among practitioners:
What has not changed: the evidence that most investors are better served by a simple allocation they will actually hold through a drawdown than by a sophisticated one they abandon at the bottom.
An allocation is a decision you make once. Rebalancing is the decision you make repeatedly, and it is where most of the practical benefit of having a target allocation comes from — it forces you to trim what has run and add to what has lagged, which is precisely what most investors will not do on instinct.
Two things make it work:
Rather than asking whether 60/40 is dead, run your actual portfolio against these four checks:
Most portfolios that feel diversified fail at least one of these. The first and fourth are the most common failures, and both are measurement problems rather than strategy problems — which means they are fixable without changing your investment approach at all.
60/40 is not dead. What died is the assumption that the ratio alone does the work. The portfolio was always a shorthand for a set of decisions about growth, protection, income and horizon, and for two decades a benign correlation regime let investors skip those decisions and still get the result.
That shortcut is gone. The decisions are still there, and they are worth making explicitly.
Disclaimer. This article is general information about portfolio construction and is not investment advice, nor a recommendation to buy or sell any security or to adopt any particular allocation. It does not take account of your objectives, financial situation or needs. Historical relationships between asset classes — including the stock-bond correlation discussed above — have changed before and can change again. The value of investments can fall as well as rise and you may get back less than you invested. Consider seeking advice from a licensed financial adviser before making investment decisions.