A 30-year analysis of the 60/40 portfolio shows it’s good in a crisis. But it may be time to take a closer look at the equity component of this strategy.
The 60/40 portfolio is the best option for investors even if they buy assets at peak prices during economic and geopolitical shocks, analysis of 30 years of market data by JPMorgan shows.
That combination of shares and bonds has trumped cash during every major geopolitical shock since the early 1990s by a cumulative average of 21 per cent, the $US3.6 trillion ($5.6 trillion) investment manager says.
But changed economic conditions mean portfolio tweaks may be warranted, including buying more European stocks. European banks, tech companies and small caps are looking attractive, especially in Germany as the government there ramps up its defence budget to become Europe’s biggest military spender.
Source: https://www.afr.com/wealth/investing/why-european-stocks-deserve-a-place-in-your-60-40-portfolio-20250519-p5m0k9