The 60/40 portfolio refers to a traditional asset allocation model that splits investment capital roughly 60 percent into equities and 40 percent into bonds. The equity portion is meant to drive long-term growth, while the bond allocation is intended to provide income and cushion the portfolio during stock market downturns, since bonds have historically moved somewhat independently of stocks. For decades this ratio served as a default benchmark for a balanced, moderate-risk portfolio.
The model has faced increased scrutiny in periods when stocks and bonds have fallen together, weakening the diversification benefit the structure depends on. That has pushed many investors and advisors to consider a third category of holdings, often grouped under alternative investments, including private real estate, private credit, and other assets that don't move in step with either public stocks or bonds. Rather than replacing the 60/40 framework outright, these additions are typically layered in to reduce the portfolio's reliance on just two asset classes.
Further reading: Real Estate Investment Strategies for Accredited Investors in 2026
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