The 60/40 portfolio is back for a surprising reason

For years, the 60/40 portfolio had been the gold standard for diversified investing. A lengthy bull rally coupled with two decades of falling interest rates produced one of the best periods in history for total risk-adjusted returns. That all ended when the financial crisis hit. The Fed dropped interest rates to 0%, and bonds hit a ceiling—there was no more share price upside from falling yields and virtually no income to speak of. Investors began pushing into riskier asset classes, such as junk bonds and ...