A quirk of the economy suggests the classic 60/40 portfolio may be obsolete, veteran investment chief says
TIMOTHY A. CLARY / AFP via Getty Images The 60/40 portfolio is no longer the most effective way to balance risk and "decent" returns, Jim Paulsen said. The Wall Street veteran said the economy seemed to be entering a new era of less frequent recessions. Investors are now rewarded more for investing in stocks, even accounting for the risk, he said. A time-tested investment strategy might be obsolete given the recent trajectory of the economy. The 60/40 portfolio — a classic split where investors allocate 60% of their money to stocks and 40% to bonds — no longer looks like the most effective way for investors to nab a decent return while shielding themselves from volatility, according to Jim Paulsen, a Wall Street veteran and the former chief investment strategist of The Leuthold Group. That's because the US economy looks like it's entered an era in which recessions have become rarer — and investors looking to maximize their returns should probably load up...
