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The WSJ warns that the 60/40 portfolio and 4% withdrawal rule, once reliable for retirement, could lead to "catastrophic" outcomes if future markets diverge from historical trends. Lower bond yields and economic shifts pose significant risks to these traditional strategies.
Two years ago Vanguard published a note for its clients titled “Like the phoenix, the 60/40 portfolio will rise again.” And it did. The mutual-fund giant’s take on the classic, “safe” mix of 60% stocks and 40% bonds, which peaked in 2021, clawed back its losses by this February. But the fact that Vanguard felt the need to talk some customers off the ledge shows how poorly understood the approach is. Even worse, investors might be worried about the wrong retirement rule of thumb.
https://www.wsj.com/finance/investing/60-40-portfolio-retirement-61716c4d?st=iuka2e9zbxa26sp
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