It may not exactly be “Beatles” versus “Stones,” but there’s been plenty of debate about the merits and otherwise of the 60/40 portfolio mix in the last few years. By this point, though, advisors and their clients should look on 60/40 less with misty-eyed nostalgia, but with a keen focus on what they really, really want, according to Max Gokhman, deputy chief investment officer at Franklin Templeton Investment Solutions.
“Today’s markets don’t signal a 60/40 comeback,” he said, in a statement. “The band isn’t broken up because stocks and bonds still work better together than alone, but investor objectives, like musical tastes, have become more nuanced.”
The 60/40 mix, the traditional combination of stocks and bonds, has attracted plenty of scrutiny in recent years amid changing investor attitudes and shifting market conditions. Last year 42% of the respondents to Charles Schwab’s 2025 Modern Wealth Survey described the 60/40 portfolio mix as outdated. Some 67% of respondents said that successful investing today requires looking beyond stocks and bonds. Among Gen X and boomer respondents, this figure was slightly higher, at 69% for both cohorts.
“Investors want portfolios that address specific goals. Can I have income in retirement? Can I buy a home? Can I send my kids to college?” said Franklin Templeton’s Gokhman, in the statement. “Portfolios need to not just smooth market swings but help meet investor needs. A strategy that doesn’t adjust as markets and life evolve is like playing the same track on repeat."
For Gokhman, it’s less about replacing 60/40, and more about moving beyond it. Investors’ portfolios, he explains, must align with their goals and holistic financial picture. “This means taking on risk when you need it, pulling it back when you don’t, and continually recalibrating,” he added. “All that while remaining prudently diversified across asset classes."
With the shakeup of the 60/40 model, alternatives are also firmly in the spotlight.
In digital assets, for example, Bitcoin and Ethereum are just the starting point, according to Franklin Templeton. “We’re seeing entirely new segments crop up across utility tokens, tokenized real-world assets, and DeFi, each with its own idiosyncratic drivers,” said Gokhman.
Fund giant Vanguard, which sang the praises of the 60/40 model in September 2024, is also adapting to changing conditions. Late last year Vanguard Global Head of Portfolio Construction Roger Aliaga-Diaz explained that the company is leaning more conservative in its time-varying asset allocation (TVAA) portfolio. Specifically, Vanguard favors a 40% stock and 60% bond mix over the traditional 60/40 approach, according to Aliaga-Diaz.
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