Why the 60/40 portfolio isn’t dead. Plus, small-cap stock picks and a REIT due for a snapback

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Why the 60/40 portfolio isn’t dead. Plus, small-cap stock picks and a REIT due for a snapback
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A roundup of investment ideas for active investors

Is the 60/40 portfolio dead? After what we’ve seen so far this year, it’s certainly tempting to write its obituary.

Consider that from Jan. 1 through June 30, a typical 60/40 portfolio of U.S. equities and bonds lost 16 per cent of its value, according to U.S. bank Morgan Stanley. That wipes out all of such a portfolio’s gains since September, 2020. The losses using Canadian stocks and bonds are only modestly better.

There’s another reason for optimism too: the smoother ride that diversification will bring. It’s simply based on mathematics, he points out in a new research report.

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