60/40’s Revenge

Last year was a veritable disaster for pretty much any version of the vaunted 60/40 portfolio. An entire generation of investors came to view that simple split as infallible, and the underlying correlation assumption as an inviolable rule. Of course, there's no such thing as a divine principle. And even the most trustworthy correlations can go bad. In 2022, stocks and bonds fell together, resulting in what, prior to Q4's rebound (which itself fizzled in December) was a $35 trillion wipeout ac