Over the four decades we associate with the onset and perpetuation of shareholder capitalism, hyper-globalization, falling developed market bond yields, advanced economy disinflation and, post-GFC, secular stagnation, a culture of dogmatism grew up around 60/40.

In truth, and depending on what indexes you use, 60/40 returns weren’t stupendously better from 1980-2019 than they were from 1920-1979.

If you patch together a century-long series from Finaeon’s historical data and key Bloomberg indexes which begin in 1979, you come away with something that looks like the chart below.

60/40 returns were roughly 7.5% from 1920 through the dawn of the Millennial era and then around 10.5% from 1980 to the eve of the pandemic.

(For reference, and as a quick aside: The big drops you see on the chart correspond to the Great Depression, the 1937-1938 recession, 1973/1974 and, at the tail-end, 2022 during the panic phase of the Fed’s rate-hiking campaign.)

While 3ppt doesn’t amount to much during any one year, when compounded over decades it’s a ton, which is to say it’s fair to delineate — as the figure above and conventional wisdom do — between the pre-1980 era and the post-1980 period when it comes to the 60/40 discussion.

Throw in the advent of indexing (at Vanguard, in 1975) which over time made it possible for anyone and everyone to effortlessly implement a passive investment strategy for comparatively nothing in the way of management fees, and it’s understandable how and why 60/40 came to be regarded as something of a sacred cow by the turn of the millennium.

But it had an Achilles heel. Implicitly or explicitly, to a greater or lesser degree, the supposed sanctity of a 60/40 “set it and forget it” allocation assumed the inviolability of a negative stock-bond return (positive equity price-bond yield) correlation. And, as it turns out, that correlation assumption was inextricably bound up with many of the socioeconomic dynamics and geopolitical conventions which defined the so-called “Great Moderation,” a kind of macro-specific corollary to neoliberalism more generally.

It’s important not to misconstrue that or otherwise overstate the case. It’s not as if the whole 60/40 premise was rendered null and void in the event stock and bond prices fell together during a single week, or over any given month or even during any one year.

Rather, it’s best to conceive of this at the 30,000-foot, theoretical level. You want the bond portion of your portfolio to cushion losses on the equity side during risk-off periods, and vice versa: When the economy’s running hot, inflation’s perky and bond yields are predisposed to rising, you expect stocks to rise too, thereby offsetting falling bond prices, as robust growth bolsters corporate revenues.

Because bonds rallied mostly uninterrupted for four decades once Paul Volcker reined in US inflation, 60/40 investors got to have their cake and eat it too: Developed market, sovereign bond yields declined in a more or less straight line from the mid-1980s through 2020, a period over which stocks scaled new record highs across locales (sans Japan and with two painful interludes in 2000 and, existentially, in 2008).

Unnoticed my many — but certainly not by all — was the extent to which the culture of dogmatism around 60/40 was itself an outgrowth of a broader consensus exemplified by Francis Fukuyama’s premature pronouncement, in 1992, of “the end of human history.”

Fukuyama’s declaration — that our species had attained, in Western-style liberal democracy, “the final form of human government,” thereby realizing Kant’s “highest political good” a mere 200 years on (less, actually) from the publication of Perpetual Peace — seems laughably naive now, in the 2020s. But it can be forgiven in the context of the time period during which he wrote. The USSR had just collapsed, not due to military pressure from the democratic, liberal West, but rather as a result of its abject failure to deliver results for the bloc’s citizens.

Simply put: Authoritarian, one-party, top-down, communist rule didn’t work. Despite its already-apparent excesses, democratic, multi-party, bottom-up, capitalism had proven itself vastly superior and, as far as anyone knew at the time, beyond a shadow of a doubt.

Neoliberal dogma had endured half a decade of scrutiny by the time the pandemic hit. Half a decade hence, even its most cherished underlying precepts, including the assumed desirability of democracy itself, are under siege. So, it took about one decade to dislodge a three-decade-old sociopolitical consensus. Once that consensus was fractured irreparably, many of the macroeconomic assumptions which grew up around it — including, critically, the idea that disinflationary dynamics would be with us in perpetuity — ceased to hold.

In a note published around 48 hours after the US commando raid that captured Nicolas Maduro in Caracas this month, Strategas Securities, the market strategy arm of Baird, summed all of this up as follows,

For years “De-Globalization” had struck us as a largely academic abstract through which to summarize a battery of seemingly disparate geopolitical threads evolving out of — among many other things — the collapse of the Soviet communist bloc; the mixed (mixed constituency and mixed results) of Europe’s economic and political union(s); the admission of China to the WTO; the asymptotic leveraging of fractional reserve-based monetary policies in service to, and ultimate defense of, the fiscal profligacy of Western economies (and their citizen spenders); and, the emergence of a new multi-directional (evolving concurrently on both the political left and right) progressive era which preceded the COVID pandemic but was exacerbated by the emergent decision to mandate the global economy to a near-subsistence crawl. A lot of chalk on that board. Then Russia invaded Ukraine…

That’s a good encapsulation. The same note went on to argue that, “The singularity of Russia’s action crystalized the interdependence of a number of disparate threads by framing ‘De-Globalization’ not just as a synthesis for discussion of ‘the decay and fracture of long-held and long-relied upon geopolitical, economic and social operating conventions,’ but as the thematic lens [through] which to reconsider traditional portfolio construction.” There’s the tie-in to 60/40.

This is a long-running topic of discussion for BofA’s Michael Hartnett who, in his latest, noted that the rolling 10-year return from a “25/25/25/25” portfolio divided equally between stocks, bonds, gold and cash is now approaching 9%, nearly on par with the post-1980 average for 60/40.

As the figure on the left, below, shows, the performance inflection for Hartnett’s “permanent portfolio” is almost vertical, helped along (obviously) by the historic rally in gold, but also some of the best cash returns since  2006/2007.

The figure on the right shows you the year-by-year breakout. That portfolio returned 23% in 2025, better than the S&P and the best since 1979.

So… what? What now? Well, gold’s plainly due for a breather. Just ask January 30, which’ll go down as the single worst session for precious metals of the modern era. And cash yields should dissipate given Donald Trump’s determination that the Fed will cut rates much further even if he has to charge Fed officials with crimes to get his way.

It’s thus reasonable to ask whether gold and cash will be the boon they’ve been to a 25/25/25/25 split over the past three years. The outlook for bonds remains challenged by the myriad factors arguing for “sticky”-higher yields, including still-elevated inflation and fiscal profligacy. As for equities… well, stocks will be stocks.

But the overarching point here isn’t about forecasting returns. Rather, this is an effort to drive home the point that the 2020s is the decade that dogma died.

Whether it can be resuscitated on any front — political, geo-strategic or portfolio strategy — remains the subject of some debate, but as Mark Carney put it this month in Davos, “We are in the midst of a rupture [and] this rupture calls for more than adaptation.”

Of course, in the same speech, Carney also admitted that in more ways than establishment figures like himself were willing to concede publicly until now, the notion that the neoliberal world order constituted some sort of utopia — that we’d achieved the “highest political good” just because we managed to forestall a third war between major powers — was little more than “a pleasant fiction” anyway.