Most investment advisers are not certain how much stocks and bonds go into what can be considered a “balanced” investment portfolio.
What had been a simple assumption prior to the 2008 financial meltdown is now subject to conjecture. That’s due to the fact both stocks and bonds can fall in unison, and they may recover differently.
As in the past, the 60% stocks and 40% bonds formula may not be standard any longer. And changes in formulae adjustments as investors age, may no longer hold.
The solution calls for more flexibility because there is no set stocks/bonds formula for an investor to use; many factors affect choices.
Upcoming inflation, retirement age and health of both investor and beneficiary, all come into play. Plus, the possibility that bonds may return more than stocks in coming years. ( See the Earl J Weinreb NewsHole® comments.)
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