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Jun 23, 2020

Saying Goodbye to an Old Friend, the 60/40 Portfolio

Saying Goodbye to an Old Friend, the 6040 Portfolio


Portfolio Construction Must Adapt to New Realities


As the investment landscape evolves, traditional low-risk assets like Treasury bonds have become less appealing due to their near-zero yields, posing challenges for investors seeking stable, low-risk income. These bonds now offer minimal income and little diversification benefit during equity downturns, making them less effective as a stabilizing force in balanced portfolios. This shift demands a strategic reassessment of asset allocation to include more robust alternatives that can better manage risk and enhance returns amid potential inflation.


In light of these developments, financial advisors are steering clients away from traditional bonds towards alternatives that promise better cash flows and are resilient against inflation. Real estate investments stand out as a particularly attractive option due to their potential for higher returns and their ability to appreciate in value during inflationary periods. Nonetheless, given their lower liquidity and higher volatility compared to bonds, these investments are most suitable for those with longer-term investment horizons.


Investing in stabilized apartment buildings can significantly outperform traditional Treasury yields, offering both a higher income and a hedge against inflation. This shift can better align investment portfolios with the current economic realities, providing both higher returns and improved risk management.


Access the entire article to deepen your understanding of how shifting from traditional Treasury bonds to alternative investments like real estate can enhance your portfolio's performance in the current economic climate. Learn more about the potential for higher returns and improved risk management through diversified asset allocation.



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Table of Contents

  • Portfolio Construction Must Adapt to New Realities

  • Asset Allocation Must Adapt to New Realities

  • How to Adapt?

  • How Can HP Ventures Group Help?




Thanks to our Contributor


HP Ventures Group


HP Ventures Group LLC - Development Services is a real estate asset management firm, focusing on multi-family properties in the Chicago region. HP manages all facets of a property’s life cycle, from acquisition, through development, to property management. Our properties include high-end residential and mixed-use buildings.

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