Core Insights - The traditional 60-40 portfolio may need to be adjusted to a 40-60 allocation due to increased uncertainty in the market [1][2][3] Group 1: Market Conditions - Interest rate decisions are uncertain, and geopolitical tensions along with economic uncertainties persist from the previous year [2] - Stock market valuations may have peaked, with the AI frenzy potentially inflating prices [2] - Vanguard's market simulation forecasts U.S. stocks to underperform compared to international equities over the next decade [2] Group 2: Portfolio Strategy - A 40-60 portfolio is suggested as an ideal allocation to mitigate risks associated with stock market corrections [3][4] - Bonds are viewed as a protective ballast for portfolios, especially in a high-interest-rate environment [3][4] - Vanguard's models indicate that a 40-60 portfolio could achieve similar returns to a 60-40 portfolio with less risk over the next decade [4] Group 3: Bond Preferences - Treasuries are preferred as a safe haven during uncertain times, with a cautious stance on corporate debt and high yield [4][5] - Vanguard recommends three Treasury options: VGSH (Short-Term), VGIT (Intermediate-Term), and VGLT (Long-Term), all featuring low expense ratios of 0.03% [5][6] - VGSH is suitable for mitigating rate risk, while VGLT offers greater yield, and VGIT balances both aspects [6]