Investing
Sell-Everything Market Sends 60/40 Funds on Worst Run Since 2008
- Bonds, stocks down together hits investors with over 10% loss
- Vanguard, Goldman see period of lower returns for mixed funds
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When practically everything is being sold off there’s almost nowhere to hide for investors, even those following one of the most conservative approaches out there.
The classic 60/40 portfolio -- a strategy named for the share allocated to equities and high-grade debt, respectively -- is down more than 10% this year, leaving it on pace for the worst drubbing since the financial crisis of 2008. Unlike then, though, it’s not just growth that’s a worry. Assets are being hurt by the risk that a stagnant economic expansion will be coupled with persistent inflation, a combination that could cause poor returns -- or even losses -- to extend for some time to come.