The Resurrection of a Popular Investment Strategy.

LPL Financial's asset allocation strategist Barry Gilbert suggests reconsidering the 60/40 portfolio, which allocates 60% to stocks and 40% to bonds, as bonds are likely to return to their historical role as a portfolio diversifier in the event of an economic downturn. With higher starting yields, a Federal Reserve likely near the end of its rate hiking campaign, and inflation coming back down, return prospects look brighter for bonds. While there is more uncertainty on the equity side, LPL's long-term stock and bond forecasts indicate improvement from last year to 2023. Gilbert believes the 60/40 remains a sound foundation for a diversified portfolio, both tactically and strategically.