Meanwhile, a 10-month, 22% S&P 500 rout has taken the froth off bubble-like valuations after the index more than doubled since its March 2020 trough. The S&P 500 is trading at 15.9 times projected earnings, below this century’s average of 16.2, data compiled by Bloomberg show.
The 60/40 portfolio was meant to capture growth, with the bonds part stabilizing things when equities drop, said Art Hogan, chief market strategist at B. Riley.
“It would make sense that if this is the first time in decades that both sides are beat up that it’s likely to be a better diversified equity portfolio mix and going to work because you’re actually starting to get the opportunity for yield on your 40%,” he said. “Plus, stocks are trading at lows, so the potential upside return now looks much better for both.”
This article was provided by Bloomberg News.