The 60/40 Portfolio Is Dead?

For decades, the 60/40 portfolio (60% stocks, 40% bonds) was the gold standard for balanced investing. But in a new era of elevated rates, persistent inflation, and fiscal uncertainty, this model may no longer offer the protection or performance investors need.

Why the 60/40 No Longer Works:

1. Bonds (long-end) are no longer the reliable ballast they once were

2. Structural forces are keeping prices elevated

3. Traditional diversification isn’t enough in a multipolar world, there is rising geopolitical and monetary risk

4. Bond vigilantes won't accept zero interest rates and are demanding higher yields on long-term debt

A New Modern Allocation: or 50/20/20/10

50% Equities / 20% Bonds / 20% Gold / 10% Cash & T-Bills

This adaptive structure is designed for resilience, inflation protection, and upside optionality.

The Why:

• Equities (50%): Growth, innovation, and long-term compounding

• Bonds (20%): Income and some downside protection (short-end)

• Gold (20%): A resilient store of value, offers protection against currency debasement via excessive money printing

• Cash & T-Bills (10%): Provides liquidity, some yields, and flexibility without forced selling

Market Dynamics Are Evolving

We’ve entered a regime where monetary and fiscal policy are no longer synchronized, and central banks can’t solve every problem with cheap money. That means portfolios must evolve. Strategies built for an era of low inflation, near-zero rates, and constant Fed support are now facing real headwinds. The path forward lies in allocations that are robust, real, and resilient.

This newsletter is for informational and educational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. All investments involve risk, including the possible loss of principal. Past performance is not indicative of future results. Iron Valley Investments is a registered investment adviser in the State of Pennsylvania. Registration does not imply a certain level of skill or training. A copy of Iron Valley Investments current written disclosure statement discussing Iron Valley Investments business operations, services, and fees is available at the SEC’s investment adviser public information website – www.adviserinfo.sec.gov or from Iron Valley Investments upon written request.