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Banks Analysts Warn That 60/40 Portfolios Could Be Battered by Inflation

  • Mueller-Glissmann sees portfolio’s risk extending drop to 10%
  • BofA calls it ‘the end of 60/40’ amid inflation, higher yield
Bloomberg business news
WATCH: Bridgewater’s Karen Karniol-Tambour says most portfolios are insufficiently hedged for inflation.(Source: Bloomberg)

The recent synchronized selloff in equities and Treasuries was likely just the beginning of what’s to come for the popular 60/40 stock-bond portfolio strategy, a growing chorus of Wall Street strategists warn.  

Bank of America Corp. called it “the end to 60/40” while Goldman Sachs Group Inc. said losses from such portfolios could swell to 10%. Similar alarms also rang at Deutsche Bank AG, where strategists including Jim Reid said a shift in the stock-bond relationship may force money managers to adjust their thinking.