The 60/40 portfolio has served investors well for the past 50 years (1). It has been the allocation of choice for traditional balanced portfolios—60% in equities for the good times, 40% in bonds for the bad (and for the yield).
The past 50 years have been characterised by falling interest rates, low inflation and low volatility. A superb environment for both bonds and equities. But we may be entering a regime change which could see these conditions reverse.