Rethinking the 60/40 Portfolio: A 10-Year BND vs. TLT Allocation Analysis
The classic 60/40 portfolio faces secular headwinds, highlighted by BND's stagnant 5-year return of +0.0%. TLT's deep -27.8% 5-year drawdown challenges the assumption that long-duration bonds always hedge equity risk. Current yield profiles (BND at 3.93%, TLT at 4.57%) present a yield-versus-duration risk tradeoff. Rebalancing strategies must account for the high correlation observed between stocks and bonds since 2022. The Stagnation of the 60/40 Portfolio: A 10-Year Bond Data Analysis Monthly $30K investment 20-year compound growth simulation Looking at the automated chart below representing a 20-year monthly $300 investment simulation at 4%, 7%, and 10% annual yields, the compounding effect is profound....